For some reason, American workers are more stressed than they were a year ago. A Charles Schwab survey of 1,000 workers who were enrolled in their company’s 401k plan found that after reporting declining levels of stress over things like saving for retirement and job security, participants’ anxiety over these issues shot up in 2020. Now, 44% of participants say saving enough for a comfortable retirement is their top stressor, followed by stock market volatility (33%) and job security (25%).
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It doesn’t help that this year’s respondents think they need to have more saved than those in the 2019 survey. Participants in the 2020 survey reported they needed to save $1.9 million for retirement, up 12% from last year. Millennials and Gen Xers estimate they’ll need an even $2 million. Boomers reported needing $1.6 million for a comfortable retirement.
Despite those big savings goals, 86% or participants say it’s at least somewhat likely that they’ll save enough for retirement, Schwab found.
“Saving for retirement has been a top financial stressor for people even when the markets were setting records and we were living through the longest bull market in history,” Catherine Golladay, executive vice president and head of Workplace Financial Services at Charles Schwab & Co., Inc., said in a statement. “Now we are in a new reality where people are trying to navigate the health and financial challenges right in front of them, while also worrying about their long-term goals.”
Despite understandably higher stress, participants are taking control by getting more engaged in their retirement planning, particularly in talking to a professional. A quarter of respondents said they’ve turned to a financial advisor since the outbreak started, and two-thirds of those have acted on what they learned. Most are rebalancing their accounts (26%) or increasing their contributions (22%).
By comparison, just 14% of participants in the full survey rebalanced their account and 12% increased their contributions.
“We are very encouraged to see so many 401k participants actively engaging with their retirement accounts during this uncertain time,” Golladay said. “Getting help and leveraging the financial planning tools and resources your company makes available can help you understand whether you are on track, or need to make adjustments to meet your long-term retirement goals, despite the challenges of the current environment.”
For some participants, making a contribution to their retirement account is a pain point they can’t overcome. The survey found 5% of respondents stopped contributing altogether, whether they talked to an advisor or not.
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HSAs are a valuable tool in the COVID age. Nearly half of participants said they use an HSA offered through their employer, and one in 10 have used it for coronavirus-related expenses.
“Participants across all age groups expect their 401k savings to be the leading source of their retirement income, and overall concerns about saving enough and job security are significantly higher this year than we have seen in previous years,” said Golladay. “As the country works to emerge from the COVID-19 crisis, we can expect that the mindset and confidence levels of 401k savers will fluctuate. Professional financial guidance will continue to play an important role in helping steady their course ahead.”