A recently released study finds that almost half of nonprofit employees are concerned about their ability to retire with financial security. This is despite three-quarters of the employees participating in an employer-sponsored retirement savings program, such as a 401k.
These findings are included in the November 2012 report, “Financial security and careers in the nonprofit and philanthropic sector,” written by TIAA-CREF and Independent Sector.
Full-time workers report being more motivated by personal satisfaction with the mission and work of the organization than by financial considerations. However, younger employees — ages 21 to 34 — place greater emphasis on both salary and benefits than their older colleagues.
One strategy to attain financial security being considered by survey respondents is to work more years. Respondents anticipate working longer at their current jobs — and 75 percent of them anticipate getting another job after retiring from their current one.
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Two factors contribute to their retirement anxiety. First, across the sector, employees report having reduced their retirement savings over the past five years; about one-third of all workers across all sectors report say they’ve dipped into retirement savings in the past year to pay for basic expenses. Another factor is fear of being unable to afford medical expenses not covered by Medicare or insurance. Fewer workers are confident they can afford to pay for medical expenses in retirement than was the case five years ago as healthcare costs have gone up while wages have decreased or not risen, and as talk in Washington about reducing Medicare increases.
Employees working longer in current jobs prevent younger people from entering the sector. Also, if the sector is unable to respond to younger workers’ focus on salary and benefits, these future leaders may leave the sector. The struggle to attract and retain talented employees will continue to increase.