While employees are generally happy in their work lives and finances, more are growing worried over their ability to retire in the future. New research from Mercer finds the ability to retire placed second as some of the top concerns for employees, runner-up to covering monthly expenses.
When the Mercer study broke down the employee base, it found the ability to retire was the second-highest worry for women. This fear came in last for men, placing fifth after physical health and fitness, personal fulfillment and purpose, workload/life balance, and job security. Other top concerns for women included covering monthly expenses, workload/life balance, mental/emotional health, and job security.
Multiple reports on inflation and market volatility have ignited concerns among workers—many who are cutting back on spending to reduce the economic impact. Well over half (57%) of employees surveyed said they have decreased their spending to counteract inflation. Women and employees under age 24 and over age 45 have reduced their spending at a higher rate than other demographics.
Others are tapping into their savings. Mercer found that almost half (48%) of respondents ages 35 to 44 are taking from their savings to supplement spending needs.
To help ensure long-term financial wellbeing, Mercer recommends employers enact different features to their defined contribution (DC) plans, including raising 401(k) matching contributions, student debt payments, health savings accounts, and allow for penalty-free distributions for emergency expenses or in the case of terminal illnesses.
For larger employers who can offer it, Mercer recommends absorbing a portion, or all, of insurance costs due to inflation until the economy recovers.
Additional findings from the research can be found here.
SEE ALSO:
- Most Americans Coping with Inflation By Cutting or Halting Retirement Contributions
- Inflation Continues to Derail Women’s Retirement Savings in 2023
- Employees Dip into Retirement Funds, Cite Inflation and Market Volatility as Key Factors
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.
