Ever since the huge drops on Wall Street in the fall of 2008, some college leaders have predicted that academics would get more skittish about retirement and might delay a decision to leave full-time teaching and research. Anecdotes abound of scholars putting off retirement to build their retirement accounts back up.
But a new national survey of academic employees by the TIAA-CREF Institute has found generally high levels of confidence by academic employees in their financial plans for retirement. The survey compares higher education employees to all other employees in the United States, and finds much more security on these issues within academe than outside it. It's worth noting, however, that Americans (on average, across professions and income levels) are notoriously poor planners about retirement, so higher confidence levels in academe may involve getting over a low bar. Further, the survey of academic employees shows one key area -- health care -- about which many in academe are worried.
While the survey was conducted for the TIAA-CREF Institute, the research arm of the pension giant, data were collected across higher education as a whole, not just from TIAA-CREF participants. Officials said that they believed the sample was generally representative of the academic work force, but it tilts toward four-year institutions and full-time employees. The survey is the latest by the institute to try to track attitudes about retirement in an economically uncertain period. (The non-faculty employee level includes all job categories, and thus would likely include both highly compensated senior administrators and other employees who are in support staff positions.)
On overall confidence, higher education employees appear in a strong position compared to others, with far more feeling very or somewhat confident that they will live comfortably in retirement, and four times the number of non-academic as academic workers not feeling much confidence at all in their ability to do so.
Confidence of Higher Education and Other Employees in Having Enough Money to Live Comfortably for Retirement
|Very Confident||Somewhat Confident||Not Too Confident||Not at All Confident|
|Higher education employees||26%||54%||12%||5%|
|All U.S. workers||16%||38%||24%||22%|
Asked about having enough money in retirement for "basic expenses," even higher percentages of academic employees feel secure, with 45 percent feeling very confident and 45 percent feeling somewhat confident, and only 5 percent feeling not too confident and 4 percent not at all confident. But when the topic shifts to medical expenses in retirements, the numbers drop significantly (even if confidence remains at a higher level than it is for non-academic employees).
Confidence of Higher Education and Other Employees in Having Enough Money for Medical Expenses in Retirement
| Very Confident|| Somewhat Confident|| Not Too Confident|| Not at All Confident|
|Higher education employees||23%||52%||15%||8%|
|All U.S. workers||12%||37%||25%||26%|
David P. Richardson, a principal research fellow at the TIAA-CREF Institute, said the results suggest that health care benefits will be important for college employees as they are making retirement decisions. He noted that paying for health care -- whether for current employees or retirees -- is an area where "historically higher education has been very generous," especially compared to other employers. "But the market is moving in a direction where we'll see shifts in the future."
The new federal health legislation, he said, will have the biggest impact on those without any health insurance (or very minimal coverage), so those in higher education who were worried before the bill passed are unlikely to now feel more secure.
Richardson also said that colleges face "a real tension" in that they are worried that too much of their health coverage spending is going to retirees (as opposed to current employees) and that any cuts in benefits for retirees may discourage employees from retiring -- at a time when many colleges want to encourage retirements.