NEW YORK, March 26, 2014 — While U.S. workers are more satisfied with their financial situation now compared with five years ago, their retirement confidence still remains below levels prior to the financial crisis, according to a new survey by global professional services company Towers Watson (NYSE, NASDAQ: TW). The Towers Watson Global Benefit Attitudes Survey also found that workers are especially worried about the affordability of health care in retirement, and significant numbers have been forced to cut back on spending and plan to delay retirement, many until age 70 or later.

The nationwide survey of 5,070 full-time employees found that nearly half of respondents (46%) are satisfied with their current finances, a sharp increase from 26% in 2009. However, nearly six in 10 (58%) remain worried about their financial future. Additionally, employees’ confidence in their ability to retire has climbed steadily since the financial crisis, with nearly a quarter (23%) very confident of their income sufficiency for the first 15 years of retirement. However, that confidence deteriorates when workers look farther ahead, with only 8% very confident of having adequate income 25 years into retirement.

“Employees might be on firmer financial footing now than they were five years ago, but many remain nervous about their finances and prospects for a secure retirement,” said Shane Bartling, senior consultant at Towers Watson. “This is especially true for older workers who are likely better positioned to assess their retirement income than workers overall. The financial crisis hit workers age 50 and above particularly hard, with the stock market fall creating a huge dent in their retirement savings and their confidence levels.”

The survey also found that workers of all ages are worried about health care costs and public programs. Only two in five employees believe they can afford any medical expenses that arise in the next 12 months. These concerns are more pronounced for mid-career and older employees, and those in poor health. Additionally, more than half of all employees (53%) are concerned they will not be able to afford the health care they need in retirement. Meantime, 83% of employees believe Social Security will be less valuable in the future, and 88% have similar fears about Medicare.

Employees are taking steps to address their financial concerns and have made it a priority to pay off debt, save for retirement and otherwise exert more control over their household budgets. Indeed, more than half of employees (56%) say they are spending less and postponing big purchases. Employees admit they need to save more for retirement, and are becoming more active and interested in retirement income planning. Just over half (51%) say they review their retirement plans frequently. The survey noted that saving for retirement is cited as the number one financial priority for all employees age 40 and older.

“Employees are getting the message that their future health care costs should be an integral factor in their retirement planning. Escalating health care costs continue to claim larger shares of paychecks. And workers’ pessimistic outlook for Social Security and Medicare adds not only to their expected financial burden but also to the age at which they can retire,” said David Speier, senior consultant at Towers Watson.

Delaying Retirement Becoming More Common

With many workers expecting to fall short on their retirement savings, nearly four in 10 plan on working longer. That’s an increase of nine percentage points since 2009. A large majority of these employees expect to delay retirement by three or more years, and 44% plan on a delay of five years or more. The profile of those delaying retirement tends toward the disengaged, less healthy and more stressed. These findings suggest a higher average retirement age in the future. In 2009, 31% of workers planned on retiring before 65, and 41% planned on retiring after 65. According to the 2013 survey, only 25% plan on retiring before 65, and half expect to retire after 65. One in three employees either does not expect to retire until after 70 or doesn’t plan to retire at all.

“Employers and employees are both facing increasing retirement pressures. Employers understand that they have a role to play in helping their workers plan and save for a secure retirement. Today’s employees are considerably more engaged, and are looking to their employers for more information about health care costs and the value of their retirement programs. The proliferation of tools, including mobile apps, also represents an opportunity for employers to help their employees plan for a successful retirement,” said Bartling.

About the Survey

Towers Watson’s Global Benefit Attitudes Survey examines employees’ attitudes toward their health and retirement benefits. Conducted in 12 countries between July and September 2013, the survey was completed by 22,347 employees, including 5,070 full-time workers in the U.S., representing all job levels and major industry sectors. Results are weighted by age, gender and household income to the national average of workers. The margin of error for the total sample is ±1.4%.

About Towers Watson

Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has more than 14,000 associates around the world and is located on the web at