Americans clearly recognize they aren’t saving enough for retirement. Now if we can just get them to do something about it.
New research released today from the 2022 Global Benefits Attitudes Survey by WTW found that seven in 10 U.S. employees (69%) recognize they are not saving enough for retirement. Additionally, those closer to retirement are now more likely than before the pandemic to say they will retire beyond the age of 70.
“Saving enough money to retire comfortably while meeting current financial needs remains a significant challenge for a majority of workers,” said Mark Smrecek, senior director, Retirement, WTW. “At the same time, workers, and especially older ones, are asking themselves when they will be able to retire. With the pandemic and current economic uncertainty with inflation, how workers are transitioning to retirement is changing.”
According to the survey, the top three reasons employees cited for not saving more for retirement were paying off debts (36%); saving money for other reasons, such as holidays, purchasing a car or paying for education (28%); and not being able to afford to save more (27%). Over half of respondents (52%) are facing key risks to their retirement security. Those risks include saving less than 5% of salary and wanting to save more, borrowing from their 401k plan and withdrawing funds from their retirement plans.
Overall, three in 10 respondents (29%) now expect to work past age 70 or never retire, which is similar to the pre-pandemic survey results from 2019; however, while just one in four younger workers now plan to retire at age 70 or later, or never retire, the number of older workers (age 50 and over) who plan to do so has risen to 36% compared with 30% in 2019. This suggests the pandemic has changed the way different ages set retirement expectations.
Nearly three in four respondents with an employer plan (73%) said their employer’s retirement plan is the primary vehicle they use to save for retirement. And while seven in 10 (69%) of those with an employer plan said their retirement plan meets their needs, many employees would like more help from their employers. In fact, 44% of all employees rank retirement in the top three issues they most want their employers to focus on.
“Employees want help with saving for retirement. So, it’s imperative for employers to ensure their Total Rewards programs provide not only benefits that meet employees’ needs but also the employee engagement resources, tools and technology to make informed decisions about saving for retirement. When their financial wellbeing is strong, employees are more likely to be engaged and productive and less likely to leave their organization,” said Jennifer DeMeo, managing director, Integrated & Global Solutions, WTW.
The survey of more than 9,600 U.S. employees was conducted during December 2021 and January 2022.
SEE ALSO:
• Retirement Savings Rates Up, But Confidence Down: BlackRock
• Top Reasons Workers Think They’ll Never Be Able to Retire