Most public sector employees — especially those in education, public safety and health and human services — say they’re not confident about preparing for retirement because they lack guidance, a survey by MissionSquare Research Institute has found.
A majority (60%) of surveyed employees say they need more support to understand how much they should save for retirement, according to the report, “Addressing Retirement Security Concerns of Employees in State and Local Government by Occupation.”
Key areas for employers to focus on when addressing the retirement security concerns of public sector employees include overall retirement readiness, understanding sources of income in retirement, financial planning education, and retirement spending strategies, according to the report.
“While increased compensation is certainly a driver of retirement readiness, financial education remains foundational,” said report co-author Zhikun Liu, Ph.D., CFP, vice president, head of MissionSquare Research Institute at MissionSquare Retirement. “Empowering employees with knowledge about how much to save and where that money should come from is vital to helping them feel secure about their future,” said Liu, who wrote the report with Thomas Korankye, Ph.D., CFP, assistant professor of Personal and Family Financial Planning at the University of Arizona.
More than 15% of public sector employees, and 23% of those in education, lack a clear retirement spending strategy. Employees identified three key areas of financial planning where they need more education or information:
Identifying which benefits are most relevant to their career stage (54%)
Understanding how employer-sponsored retirement plans are taxed (50%)
The survey found significant differences in how the workers plan to manage retirement withdrawals. Many plan to use a do-it-yourself approach, in contrast to a smaller number who prefer to consult financial advisors or follow guidance from their employer or retirement plan provider. These choices show that more personalized retirement planning tools and education are needed, the authors wrote.
“It remains essential for policy-makers, employers, and financial professionals to understand and address the financial challenges facing public workers, including a growing need for personalized financial guidance and policy solutions,” Liu said in a news release. “These individuals dedicate their careers to serving our communities, and they deserve access to the resources necessary for a financially secure retirement.”
The survey was conducted in partnership with Greenwald Research between Sept.13 and Oct. 4, 2024, and collected responses from 1,009 full-time state and local government employees about their current financial situations, retirement expectations, and the types of support they need most.
The MissionSquare Research Institute conducts research to assist state and local governments and other public service sector organizations seeking ways to meet their financial obligations.
