While an impressive 78% of tech workers are confident they are headed for a comfortable retirement, only 44% of hospitality workers can say the same, according to a new study released Dec. 12 by San Francisco-based 401(k) provider Human Interest.
This represents a high and low in the new Human Interest and OnePoll survey of 2,000 workers across 11 industries about their retirement saving activities and attitudes. Each industry was scored against a set of nine retirement preparedness factors.
When comparing industries across all factors, workers in seven industries reported above-average preparedness. Retail workers most closely represented average preparedness. Workers in three industries reported below-average preparedness.
The survey found workers in the technology industry feel the most prepared for retirement overall, followed by finance workers (which includes banking, insurance, and real estate). Education comes next, followed by construction. Advertising/media/entertainment was next, with logistics and medicine/healthcare also reporting above-average preparedness.
As for the industries reporting below average preparedness, hospitality workers, which include hotel, restaurant, and recreation employees, scored lowest overall at 44% feeling confident they will retire comfortably.
Hospitality workers are also the least likely to be offered a retirement plan at work (39% compared to an across-industry average of 63%) or to save in a 401(k) or 403(b) (22% compared to 33%). They are also the least likely to contribute 11% to 15% of their paycheck, which fits within a threshold often recommended by industry experts.
Hospitality workers are also most likely to rely financially on family members in retirement (19% expect to do so, compared to an average of 10% across other industries).
The study’s “retirement preparedness” factors include access to, and eligibility for, a retirement plan through work. Recent analysis by Human Interest and BlackRock showed that the lack of access is a crucial obstacle to retirement saving. The same analysis found that the presence of an emergency fund is another factor in the industry ranking, as workers with emergency savings are more likely to contribute to a retirement plan and less likely to make a hardship withdrawal.
Industries are also ranked based on the paycheck percentage that workers contribute to a retirement account and the amount they have saved. Finally, the ranking considers workers’ expectations and fears about retirement, including whether they expect to retire comfortably or to rely on family members financially, and whether they expect to retire early.
Other interesting findings from the survey:
- Tech workers are the most likely to be offered a retirement plan by their employer.
- Finance workers, while they scored highly across the board, are the most likely to say they’re “unsure” how much they contribute to their 401(k).
- 50% of advertising/media/entertainment workers are saving in a 401(k) or 403(b), the highest rate of any industry. But they are the most likely to contribute less than 5% of their paycheck.
- Logistics workers are the most likely to say they are eligible for their employer’s retirement plan, suggesting that the industry is doing a good job with plan access. They are also the most likely to see investing in crypto as a form of saving.
- After hospitality, retail workers are the least likely to be eligible for their employer’s plan.
- Those working in agriculture are the most likely to have less than $100,000 saved for retirement, and the second least likely to have an employer-sponsored retirement plan. 15% of agriculture workers surveyed don’t plan to retire.
“Every worker, in every industry, should be able to plan for retirement,” said Rakesh Mahajan, Chief Revenue Officer of Human Interest. “It’s critical that employers across all industries not only offer retirement plans, but also make sure these plans are employee-friendly.”
Read the full rankings of industries by factor.
SEE ALSO:
• Human Interest Streamlines Retirement Planning Process with Fast Track 401(k)
• BlackRock Invests in Human Interest
• 7 Demographic Disparities Impacting Retirement Readiness
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.