More than 80 percent of higher education faculty say they are confident they will have enough money to live comfortably in retirement, but a very small percentage of them have actually done the math to figure out if the money they've saved will produce enough income in their later years.
According to Fidelity Investments' "Higher Education Faculty Study," this lack of planning could result in faculty members reaching retirement age but not wanting to retire. They also won't feel prepared for long-term expenses or know how to turn their retirement assets into regular income.
Fidelity found that the majority of older faculty members need some form of financial guidance. Thirty-one percent said they are asking for help in developing a retirement income plan; 36 percent are choosing specific investment; and 30 percent are assessing an overall financial plan.
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Employees of all ages should have an investment plan in place, the report said. And while older faculty are nearly twice as likely to have a formal investment plan than a retirement income plan, there is still a need to increase the number of faculty who have both plans.
Younger faculty, those under age 54, also are falling short in this area, with only 17 percent having a formal investment plan in place. More than 61 percent of younger faculty members surveyed said they often worry about their financial situation.
Older faculty members are much more likely to seek the help of a financial professional than their younger colleagues. In fact, 47 percent of pre-retiree faculty report working with a financial advisor, compared to just 29 percent of their colleagues under age 55, Fidelity found.
Older faculty are much more likely to have planned for future medical expenses, such as day-to-day health care than younger faculty, but when it comes to planning for long-term care expenses, like assisted living facilities, only 54 percent say they are confident they will have enough funds to pay for them.
Fidelity is a leading retirement plan provider for the not-for-profit health care market and the second-largest provider in higher education.
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