Majority of public sector workers need help determining how much to save for retirement, a new MissionSquare Research Institute report finds

WASHINGTON, D.C. – A new research report from MissionSquare Research Institute reveals that a majority of public sector employees surveyed, particularly those in education, public safety, and health and human services, lack the guidance they need to confidently prepare for retirement. According to the report, “Addressing Retirement Security Concerns of Employees in State and Local Government by Occupation,” a majority (60%) of surveyed employees indicate they need more support in understanding how much they should save for retirement.

Co-authored by Zhikun Liu, Ph.D., CFP®, vice president, head of MissionSquare Research Institute at MissionSquare Retirement, and Thomas Korankye, Ph.D., CFP®, assistant professor of Personal and Family Financial Planning at the University of Arizona, the report revealed key areas for employers to focus on when it comes to supporting the retirement security concerns of public sector employees. The primary areas raised across all occupational groups include overall retirement readiness, understanding sources of income in retirement, financial planning education, and retirement spending strategies.

“While increased compensation is certainly a driver of retirement readiness, financial education remains foundational,” said Dr. Liu. “Empowering employees with knowledge about how much to save and where that money should come from is vital to helping them feel secure about their future.”

The study also found that more than 15% of public sector employees, and even more (23%) among those employees in education, do not have a clear retirement spending strategy, highlighting a significant gap in financial planning. The study also asked employees to identify specific areas of financial planning where they feel a strong need for more education or information, and three consistent areas emerged:

  • Determining how much to save for retirement (over 60%);
  • Identifying which benefits are most relevant to their career stage (54%); and,
  • Understanding how employer-sponsored retirement plans are taxed (over 50%).

The report also highlights significant differences in how employees plan to manage retirement withdrawals. While some prefer to consult financial advisors or rely on guidance from their employer or retirement plan provider, many favor a do-it-yourself approach. These variations indicate a need for more personalized retirement planning tools and education.

“It remains essential for policy-makers, employers, and financial professionals to understand and address the financial challenges facing public workers, including a growing need for personalized financial guidance and policy solutions,” added Dr. Liu. “These individuals dedicate their careers to serving our communities, and they deserve access to the resources necessary for a financially secure retirement.”

The findings are based on a nationally representative survey conducted in partnership with Greenwald Research. Fielded between Sept.13 and Oct. 4, 2024, the survey collected responses from 1,009 full-time state and local government employees about their current financial situations, retirement expectations, and the types of support they need most. This study examines the survey data in the context of workforce demographics, retirement preparedness, and broader challenges public sector employees face in achieving long-term financial security.

The MissionSquare Research Institute conducts research to support state and local governments and other organizations in the public service sector that are looking for innovative ways to meet their financial obligations. For more information and to access the full report, visit research.missionsq.org.

About MissionSquare Research Institute

MissionSquare Research Institute MissionSquare Research Institute promotes excellence in state and local government and other public service organizations to attract and retain talented employees. The organization identifies leading practices and conducts research on retirement plans, health and wellness benefits, workforce demographics and skill set needs, labor force development, and topics facing the nonprofit industry and education sector. MissionSquare Research Institute brings together leaders and respected researchers. More information and access to research and publications are available here.

About MissionSquare Retirement

Since its founding in 1972, MissionSquare Retirement has been dedicated to simplifying the path to retirement security for public service employees. As a mission-based financial services company, we manage and administer over $72.0 billion in assets.* Our commitment to delivering results-oriented retirement plans, education, investments, and personalized advice sets us apart. Explore how we enable public service workers to build a secure financial future. For more information, visit www.missionsq.org or follow the company on Facebook, LinkedIn, and X.

* As of Dec. 31, 2024. Includes 457(b) plans, 401(a) plans, 403(b) plans, Retirement Health Savings plans, Employer Investment Program plans, affiliated IRAs, and investment-only assets.

Media Contact:
Laura Maulucci
MissionSquare Retirement
(202) 655-5420
LCMaulucci@missionsq.org

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