Workers are taking action on their investments to curb anxiety in the market.
The latest Protected Retirement survey from Nationwide finds that employees increasingly say they’re on track for retirement. Seventy-one percent of younger employees, listed as those between the ages of 22 to 34, were more likely to believe they’re financially prepared for the future. This was a 15-point rise compared to 2023, reports Nationwide.
The reports notes that because employees are actively engaging in their investments, more are feeling an increase in their confidence levels. Over three-quarters (76%) of workers check their balances at least once a month and three in 10 modify their contributions or rebalance their investments monthly.
Employees are also shifting how they view retirement. Instead of seeing it as a lump sum, 59% are thinking about retirement savings in terms of the monthly income it will provide in the future.
As a result, more are now aware of lifetime income options. Thirty-seven percent of employees understand annuity features—a 20-point jump compared to 2023. Another 73% are asking their workplace plan to include an automatic way to convert assets into a stream of income for retirement. This number rises to 77% for employees ages 45 or older.
“I’m thrilled to see that retirement plan participants are viewing 401(k) plans as so much more than just a savings vehicle by thinking about them as a comprehensive tool to help prepare for and live in retirement.” said Cathy Marasco, vice president of Protected Retirement solutions at Nationwide. “In this new era, it’s crucial that we meet employees where they are with the right education and solutions to help them achieve financial security in retirement.”
Lingering anxiety
Despite their engagement, workers continue to worry about the long-term. Fifty-six percent of employees report concerns about outliving retirement income, and 61% are having trouble understanding how long savings will need to last.
These anxieties underscore critical financial gaps that employers and financial professionals must address, notes Nationwide. For example, professionals with clients interested in annuities should provide education and communications material on the tools, the firm writes.
According to the findings, most employers are interested in including guaranteed income options in target date funds (85% of private and 91% of public employers) or managed accounts (81% of private and 87% of public employers). This highlights an opportunity for advisors to satisfy a retirement insecurity gap, the firm adds.
“The next opportunity is to enable automatic income in retirement with protected retirement solutions—and that’s not just a nice-to-have,” states Marasco. “It’s a necessity to help ensure that participants can retire with confidence and security. Employers and financial professionals must prioritize these solutions, and participants should actively seek them out to help secure a stable financial future.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
