Despite a record-setting economic expansion that continued throughout the decade of the 1990s, studies show that a majority of U.S. workers say they're worried about their financial future — especially when it comes to their health and retirement benefits.

Additionally, more than half of the workers report they think about retirement planning, their children's education, and potential health problems at least once a month, according to "The Principal Financial Well-Being Index," a quarterly study conducted by the Principal Financial Group, a financial services firm based in Des Moines, Iowa. According to Principal, the survey is designed to identify consumers' concerns about their health and retirement benefits and workplace trends.

The survey is a poll of randomly selected full-time employees of small and mid-size companies (businesses that employ between 10 and 499 workers).

The survey done for the 3rd quarter of 2004 revealed that comprehensive benefits plans not only increase workforce retention, but can motivate and improve employee performance as well. A majority of workers (64 percent) say that a good benefits package would keep them at their current companies and say a good benefits plan would encourage them to work harder and perform better.

The study, however, found that only 26 percent of the employees say they believe their current employers are concerned about the long-term financial future of their workers.

In light of the survey findings, it's clear that "offering a strong benefits package is a sure way for growing companies to improve their competitiveness and retain their top talent in the New Economy," says Dan Houston, Principal's senior vice president.

Health insurance ranks No. 1

No doubt about it, the most important benefit in a comprehensive benefits package is health insurance. All employee respondents were asked to rate each benefit in terms of how important is was to them on a 10-point scale with 10 being "Very Important." The top rated benefit in terms of importance is health insurance followed by defined contribution plans (the most common of which is a 401(k) plan), defined benefit pension plans, disability insurance, and life insurance. Of those benefits rated an "8," "9" or "10" by respondents — meaning they were considered important — the least important benefit to workers is stock options.

Surprise finding

Although the survey highlights workers' worries over their long-term financial future, workers still look forward to retiring. For many, however, retirement seems to be getting further away. The expected age of retirement climbs as employees' age groups increase — 18-34 year olds expect to retire at age 64, while 55+ year olds expect to retire at age 67. This is an increase in age from the 2001 survey in which the average employee was thinking of retiring at age 63.5, with nearly 9 percent expecting to retire before age 55.

However, 27 percent of the workers polled agree that they "have not yet planned to save for retirement." And while some workers are contemplating retiring before age 65, the majority of employees (53%) expect their standard of living will decline in retirement. Particularly for employees over the age of 55, 2 out of 3 (66%) say their standard of living will decline in retirement.

Considering that the life span of Americans continues to lengthen, and that baby boomers are approaching retirement age faster than ever, the study suggests workers are likely to put even greater importance on company-sponsored retirement plans.