K-12 and Retirement Prep: Saving, but Wary

K-12 public school employees are still saving for retirement, but their concern about their financial security in retirement outstrips that of other public-sector employees, according to a recent study. 

The Center for State and Local Government Excellence reports in its study, “K-12 Public School Employee Views on Finances, Employment Outlook, and Safety Concerns Due to COVID-19,” that a majority of respondents have not changed the amount they are saving for retirement. At the same time, they evinced more concern than other public-sector employees about the timing of their retirement and their ability to save sufficiently to be financially secure in retirement.

More specifically, 44% of K-12 employees told the center in October and November 2020 that they were very or extremely concerned about being able to retire when they want to, whereas 37% of their other public-sector employees were similarly worried. Similarly, nearly half—48%—of K-12 employees said that they were very or extremely concerned about their ability to be financially secure during retirement, while 39% of other public-sector employees held such sentiments.

Those results are buttressed by the 45% of K-12 employees who expressed the view that those in their sector who retire can live comfortably in retirement; a majority had thought so in March as the pandemic began to take hold. 

But all those worries have not translated to increased saving for retirement. A majority of K-12 employees may have held their savings rate steady, but 26% reported that they somewhat or significantly reduced the amount they are saving for retirement. Just 10% of K-12 employees and 7% of other government employees increased the amount they save for retirement. 

Employer Role

There was a sharp drop in the satisfaction among K-12 employees regarding the retirement benefits their employers offer them: in March, 61% told the center they were satisfied; in October, 40% did. And despite those satisfaction levels, confidence was low regarding what their employer does to prepare them for retirement: 37% felt it in March, and 34% did in the fall. Further, almost half—48%—indicated in the fall that it is hard for them to negotiate or raise concerns about their employee benefits. 

It is possible that these results may at least in part be due to ignorance of what the retirement-related benefits their employers offer: in March and October, just under half of K-12 employees described themselves as knowledgeable about that.