Three-Fourths of Higher Education Baby Boomer Faculty Members Plan to Delay Retirement, or Never Retire at All

Fidelity® Study Finds Faculty Boomers Likely to Delay Retirement Due to Both Economic and Professional Reasons

BOSTON – Fidelity Investments®, a leading provider of workplace retirement plans in the not-for-profit higher education market, today announced results of its Higher Education Faculty Studyi, which examined the behaviors and attitudes of baby boomer (ages 49-67) faculty members at higher education institutions. The research found that 74 percent of these boomers plan to delay retirement past the age of 65, or never retire at all. When asked the reasons for this delay, they not only cited professional reasons (81 percent), but also economic concerns (69 percent) – suggesting a need for more financial guidance.

The study also examined the reasons faculty boomers would delay retirement and found a range of issues. Of those who say they will delay retirement for economic reasons, 55 percent are unsure they have enough retirement savings, 42 percent want to maximize Social Security payments, and 42 percent believe they will need continued health insurance. Professional reasons for delaying retirement were just as compelling. For the faculty boomers who will delay retirement due to professional reasons, 89 percent want to stay busy and productive, 64 percent say they love their work too much to give it up, and 41 percent are unwilling to relinquish continued access to – and affiliation with – their institution.

“Making the decision to retire is difficult for any baby boomer, but it can be even more complex for faculty who are deeply dedicated to education, and the students and institutions they serve,” said John Ragnoni, executive vice president, Tax-Exempt Retirement Services, Fidelity Investments. “We understand that financial security is an important factor for faculty contemplating retirement, and that personal and professional considerations will also weigh heavily as they decide when they will retire.”

Faculty Boomers Show They Lack Formal Financial Planning
While the reasons for delaying retirement range from economic to personal, many boomer faculty members indicate they need help in specific areas as they consider their financial future. Six in 10 (61 percent) faculty boomers are confident they can learn about investments and finance on their own, but 70 percent do not have a formal investment plan in place for their retirement savings, which is a critical first step in understanding one’s financial ability to retire.

Additionally, seven in 10 (70 percent) faculty boomers say they have at least some experience as investors. But when asked in which areas they need financial guidance, 43 percent say they need help choosing specific investments, 36 percent want help developing a formal plan for their retirement savings strategy, and 35 percent want help assessing their overall financial picture, goals and needs.

“As many boomer faculty have not created a formal financial plan, it’s no surprise they have concerns about retirement,” said Ragnoni. “Having a holistic financial plan that complements the professional, personal and economic resources available through their institution’s faculty retirement program can help boomer faculty members anticipate and alleviate financial uncertainty as they prepare to transition from their full-time academic careers.”

Many institutions have implemented retirement programs aimed specifically at providing faculty with financial, professional, and personal incentives to support them in making the transition to the next phase of their lives. Two-thirds (66 percent) of faculty boomers at institutions with faculty retirement programs think such programs are important, especially as they relate to providing retiree health care benefits. Three–fourths (76 percent) of all boomer faculty members cite retiree health care benefits as an important feature of a faculty retirement program. In addition, 53 percent want continued access to facilities to be part of a faculty transition program, while 45 percent want emeritus status and 43 percent would like guidance on financial and retirement planning.

Fidelity Offers Broad Resources to Help Faculty Master Their Financial Planning
As a leading provider of workplace retirement plans to the higher education marketplace, Fidelity assists tax-exempt plan sponsors with retirement planning, serving more than 4 million not-for-profit plan participants in nearly 12,000 workplace savings plansii. Complementing a retirement plan for faculty members, Fidelity offers a wide-range of guidance, education, and planning resources to help employees understand their retirement readiness.

Fidelity’s services include in-person guidance at on-campus events, at Fidelity’s 182 nationwide Investor Centers or by calling a Fidelity investment professional. As part of its comprehensive offerings, Fidelity provides online retirement planning tools, webinars and other planning resources to help higher education faculty ease into retirement.

Fidelity Investments and Fidelity are registered service marks of FMR LLC.

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i Survey was conducted by Versta Research, an independent firm based in Chicago, between February 21 and March 6, 2013, among 909 benefits-eligible employees in the United States, including 608 who work at colleges or universities. Respondents were screened for current employment status, benefits eligibility and for having at least some involvement in household investment decision-making. The higher education sample included 224 employees at private institutions and 384 employees at public institutions, of whom 103 were employed at two-year institutions and 505 were employed at four-year institutions. Data were weighted on both these dimensions to reflect the current population of employees according to 2011 data from the U.S. Department of Labor. Versta Research is not affiliated with Fidelity Investments.

ii Fidelity business data as of February 29, 2013.