Survey of Elder Pennsylvanians Shows Retirement Savings are Down, Concerns About Health Care Up
Widener University has released findings from the sixth and final volume of The Widener Elder Pennsylvanian Survey, revealing the impact of the recession on Pennsylvania’s elders. Results from this survey, which was completed in March 2011, were compared with those from a survey completed before the recession in May 2007.
According to Dr. Eric Brucker, professor of economics at Widener and principal investigator of the survey, three themes have emerged from the findings:
1. The “Great Recession” has impacted the retirement savings and sense of security of elders.
- The non-retired respondents are significantly worried about outliving their retirement saving by age 75. Currently, 70 percent are very or somewhat worried about outliving their savings, compared with only 50% in 2007.
- The retired report inadequate savings. Currently, 46 percent of the retired report a financial net worth of less than $50,000, and 62 percent report under $100,000. Of the retired respondents, 30 percent said that their retirement income was less than half of their preretirement income.
- The non-retired lack confidence in their retirement savings. Only 11 percent said that they had done an excellent job in saving as much money as they had planned to do. A majority of respondents said that they could not afford to save more, and 35 percent cited economic uncertainty as another reason for not saving enough.
- The non-retired expect to work longer, but finding work may prove difficult. Currently, 42 percent of the non-retired expect to retire at or before age 65, a decrease from the 48 percent who responded in this way in 2007. Those who are planning to work longer are faced with a higher unemployment rate of 7.8 percent compared to that of 4 percent in 2007. Of those wishing to work in retirement, 30 percent were unable to find part-time work compared with 14 percent in 2007.
- I have little doubt after reviewing the results of this most recent survey that Pennsylvania’s elders are much more worried now than before the recession about retirement,” said Brucker. “This fear only perpetuates our nation’s economic problems. People want to work longer because of inadequate retirement savings, but unfortunately elder unemployment rates have increased. Furthermore, they aren’t saving enough either because they can’t afford to or they are uncertain about what to do with their money. Their situation certainly does not pave the way for job growth and recovery.”
2. Public sector retirees have fared significantly better than private sector retirees.
- Public employees in governmental retirement plans are more likely to enjoy defined benefit over defined contribution plans. Fifty-five percent of public sector employees report that the largest single source of their retirement income is from employer-sponsored pensions. Only 21 percent of the private sector respondents had a defined benefit program as their largest source of retirement income.
- Public employees are significantly less worried than private employees about their savings. Forty-one percent of non-retired public employees are not at all worried about outliving their retirement savings compared with only 26 percent of the private sector respondents.
- Retirement income is a higher percentage of working income among public employees. Half of the public sector retirees compared to 37 percent of private sector retirees report that their current retirement income is more than 70 percent of their previous non-retired income.
- A significant portion of our sample – 27 percent - represented public employees and retirees, and this group’s responses show that not all elders are in dire straits regarding retirement,” said Brucker. “This public cohort is comfortable mainly because members enjoy a defined benefit plan. However, they should be concerned about their future from a collective viewpoint. It’s unlikely that the state can continue to fund these plans, which are already underfunded by billions of dollars, without making some significant changes.”
3. All elders have grown increasingly concerned about health care costs.
All elders are increasingly worried about spending all of their money on health care. More than two-thirds, 68 percent, of all respondents said that they were worried or very worried about having to spend all of their money on health care before age 75. This is an increase over the 57 percent of respondents who expressed this same fear in 2007. Out of the 2011 non-retired respondents, 47 percent said that they expected the future affordability of health care to get worse for them.
- Most respondents, even those with chronic disease, do not have long-term care insurance. While 96 percent of respondents reported having some form of health insurance, only 26 percent of the retired respondents reported having Long-Term Care Insurance, with most sighting that it was too expensive. Those who do not have LTC indicated that it was too expensive or they didn’t think they would need it.
- Eighty percent of respondents indicated that they have one or more chronic diseases. Arthritis and high blood pressure were the two most common. Of those with chronic disease(s), 92 percent saw their family doctor, 46 percent a specialist, 25 percent either a nurse practitioner or physician assistant and 10 percent a physical therapist.
- Elders reported using alternative methods of care and sources of information. More than 90 percent of all respondents indicated that a physician was their primary source of care, while 60 percent had indicated that they had also used a NP or PA. Thirty-six percent of all elders reported using a website such as WebMd for medical information.
In this new election cycle, health care remains at the center of debate, but much of the rhetoric is focused on who is paying rather than why cost continues to rise,” said Brucker. “The share of GDP going to health care in 1980 was 9.2 percent. In 2000, it was 13.8 percent and in 2009 17.6 percent. The Congressional Budget Office projects that, in the absence of change, the percent of GDP going to health care would rise to 25 percent in 2025, 37 percent in 2050 and 49 percent in 2082.”
According to Brucker, many of the survey results hint to the fact that elders are willing to experiment with new methods of health care to help curb costs. “Our findings suggest that the elders are likely to be more receptive to lower cost in-home and community care. I also found it interesting that 60 percent of all respondents reported that they regularly use a personal computer and a greater percentage uses a cell phone. This technology may become more and more important to help individuals become active participants in managing their own care – especially those with chronic disease. Perhaps they’ll be able to chart their blood pressure or sugar with the touch of a mouse or check in with a nurse practitioner over the phone. The survey shows that they’re willing to talk with people other than their primary care physician and they’re able to use the tools necessary to facilitate new innovations in health care.”
About The Survey
The information in this release is based on survey research conducted by Dr. Eric Brucker, professor of economics at Widener University, with support from the Pennsylvania Department of Community and Economic Development. Brucker is the principal investigator as well as co-author of "The Widener Elder Pennsylvanian Survey: Baby Boomers to Centenarians Vol. VI.” The telephonic survey, which was undertaken in March 2011, randomly polled 750 working Pennsylvanians born before 1964, the last birth year of the baby boomers. The survey was structured so that half of those polled indicated that they were retired.
About Widener University
Widener University is a private, metropolitan university that connects curricula to social issues through civic engagement. Dynamic teaching, active scholarship, personal attention, and experiential learning are key components of the Widener experience. A comprehensive doctorate-granting university, Widener is comprised of eight schools and colleges that offer liberal arts and sciences, professional and pre-professional curricula leading to associate, baccalaureate, master's and doctoral degrees. The university's campuses in Chester, Exton, and Harrisburg, Pa., and Wilmington, Del., serve some 6,700 students. Visit the university website, www.widener.edu.