At Work

The solution to retirement income is at hand

Here you go, millennials willing to pay more for a secure retirement. So what’s the problem, just jack up the Social Security payroll tax and the benefits in the future; problem solved.‼️ Of course they aren’t really willing to pay more because if they were, they would be saving more and spending less. 

September 28, 2016 Wednesday 12:37 AM EST

Willis Towers Watson, an advisory, broking and solutions company, issued the following news release:

Faced with mounting worries over their finances and retirement outlook, six in 10 millennials say they are willing to sacrifice pay for more secure retirement benefits. At the same time, however, their appetite for forgoing some of their pay for reduced or more predictable health benefit costs has decreased over the last few years, according to research by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company.

The Global Benefits Attitudes Survey found the number of millennials willing to pay a higher amount for a guaranteed retirement benefit has increased from 42% in 2009 to 59% this year. Two-thirds of boomers (66%) would also be willing to sacrifice pay for more secure retirement benefits, versus half in 2009. However, only a third of millennials (32%) and boomers (34%) said they are willing to pay a higher amount for lower or more predictable health costs, a decline from 43% and 45%, respectively, in 2009.

“Employees of all generations, including millennials, are feeling vulnerable about their long-term security,” said Steve Nyce, senior economist at Willis Towers Watson. “Employees young and old actually have a strong desire for more retirement security and are willing to give up pay to get more guarantees or a larger retirement benefit. Interestingly, employees seem to be saying they have enough health coverage now and are reluctant to pay more.”

The survey also highlights the importance of core health care and retirement benefits to millennials. When asked how they would spend money if their employer provided them with an allowance to spend on a variety of benefits, millennials said they would allocate more than half to health care and retirement plan benefits (27% each). Additionally, almost half of millennials (48%) ranked pay and bonus over all other benefits if given a choice, a clear indication of their financial issues and need for more financial flexibility today.

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1 reply »

  1. What every generation wants is a guaranteed income where the cost of the guarantee is directly or indirectly paid by someone else. Consider Professor Theresa Ghilarducci’s Guaranteed Retirement Accounts (probably has surfaced 20 times over the past 10 years, see her 3rd version released in 2015:

    http://www.economicpolicyresearch.org/images/docs/retirement_security_background/GRA_3.0.pdf )

    Now look at what the true costs are to guarantee retirement incomes – released just last week:
    https://www.brookings.edu/research/you-get-what-you-pay-for-guaranteed-returns-in-retirement-saving-accounts/

    There is a reason why guarantees are so expensive – it is called COST. It is the same reason why so many defined benefit pension plans have been curtailed, and why, since BEFORE TEFRA (1982) and BEFORE the advent of the 401(k) (generally starting after 1981) we started to see plan sponsors avoid adopting defined benefit pension plans.

    I will never forget when I asked tens of thousands of my workers in 1986 if they would be willing to contribute more for a better health plan – only 45% said yes, and when I asked those folks how much more they would be willing to contribute each month to keep their deductible at $200 and their coinsurance maximum at $800 per year (single coverage, double that amount for family coverage), the response I got was $5 – $60 a year!

    Sure that is 30 years ago, but, if I did the same survey today, the response I would expect to receive would not even be 45% and wouldn’t even be $5 a month – it would be something like … “I already pay too much”!

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