Financial Fears: Study Finds Public Sector Employees Stressed About Retirement Savings

The average public sector employee is reaching an age where they can begin to see the retirement years on the horizon.

The average federal employee age is 47, according to the U.S. Office of Personnel Management, which also notes that retirement-age federal workers outnumber younger employees by two to one.

At the state level, the median government employee age is 46, compared to 43 in the broader population, according to The Council of State Governments.

As these workers and their public sector colleagues consider their financial futures, a new survey reveals that many of them have serious doubts about whether they’ll have enough savings to last them through retirement.

In a recent poll of more than 1,000 state and local government employees, MissionSquare Research Institute and Greenwald found 81% of respondents saying they are concerned they won’t have enough money to get them through their retirement years. In addition, 78% said they won’t have enough money to live comfortably in retirement, and only 9% indicated that the benefits provided through their employer are “very sufficient” to meet their retirement needs.

“Our research underscores the need for more financial education and planning resources,” said Zhikun Liu, PhD, vice president and head of MissionSquare Research Institute, in a statement highlighting the survey’s key findings.

“Public employees vary widely in their approaches to managing their retirement savings, from seeking advice from friends to performing their own calculations. The process of decumulation of retirement assets carries significant implications, and mistakes can dramatically impact whether employees spend down their nest egg prematurely.”

The survey found public sector workers sharing more short-term worries as well. For example, 73% of state and local employees said they are worried they don’t have enough sufficient emergency savings.

Respondents did share some steps their employers could take to help improve their retirement outlook, such as paying higher wages (78%), offering improved retirement benefits such as employer matches (54%) and better retiree healthcare benefits (50%).

They also expressed a desire for more financial education and planning information, with 65% saying they could use guidance on how much to save for retirement. Another 53% said the same about what type of benefits they need at different career stages, with 47% suggesting they need more education in terms of how defined contribution plans work.

“These survey results clearly indicate that there is much work to be done in terms of shoring up financial security across the board. As a nation, we can and should do more to ensure everyone is best positioned for a secure retirement,” said Andre Robinson, MissionSquare Retirement CEO and president, in a statement.

“If workers are worried about their finances, they can’t focus on their jobs. The good news is that our research points to practical solutions that can be implemented to bolster retirement readiness—from expanding auto-enrollment to increasing financial planning and education resources.”