Last Updated Sep 30, 2011 10:03 AM EDT
Survey respondents also reported an increased concern about another recession -- 42 percent think another one is coming, a number that's nearly twice the percentage of workers reporting the same concern in the 2010 survey. And 45 percent of respondents fear a job loss, up from 36 percent in 2010.
The bottom line is, increasing your contributions while fearing a job loss is brave -- and smart. For instance, a recent Fidelity survey showed that the highest average 401(k) balances in 2011 belonged to employees who stayed the course during the 2008-09 downturn; that is, these workers continued contributing to their 401(k) plans and maintained their equity allocation.
The workers surveyed in Mercer's survey must be subscribing to Allan Roth's "hurts so good" investing strategy. Roth argues that if your investing choices cause you pain, you must be doing something right.
The Mercer survey also reports that 77 percent of workers are confident they're contributing the right amounts to their 401(k) plans. But should they really be that confident? Let me point out that as a group, workers age 50 and over have average 401(k) account balances that are far below the amounts needed for a traditional retirement -- that is, where you retire full time in your mid-sixties. Older workers will need to "save 'til it hurts" to catch up to the amounts required for a secure, traditional retirement, or they'll need to adopt alternative lifestyle strategies for their retirement years to make up for those lack of funds.
Younger workers will need to contribute at least 10 percent and preferably 15 percent of their pay each year for periods of 25 to 30 years to afford a traditional retirement. These savings targets include matching amounts contributed by employers.
But I don't mean to rain on the parade of good news from the Mercer survey. It's heartening to hear that workers are taking responsibility and accountability for funding their retirement. This is smart in light of potentially reduced benefits from Social Security, and the further decline of traditional pension plans.
More on MoneyWatch:
- Study: 401(k) Investors Who Stayed the Course in 2008-2009 Were Big Winners
- "Hurts So Good" Investing
- The Secret That Will Help You Afford Retirement