A recent study by Schwab Retirement Plan Services showed that retirement is the top financial stress source for US workers. Even for younger workers like Millennials, retirement savings is the top worry at the workplace.
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Saving enough for retirement was cited 40% of the time as the top source of significant financial stress; almost twice as much as job security at 24%, or paying-off credit card debt at 21%.
Sadly, about half of the 1,000 respondents said they felt it was impossible to save enough in their 401k plan for a comfortable retirement and 43% admitted to not knowing how much they actually need to save for retirement.
The results here simply underscore the information gap that still exists for workers and retirement knowledge. While almost 90% of workers say that a 401k plan is a must-have for considering employment, almost half say they don’t have a grasp on understanding their 401k plan.
More Findings from the survey…
According to the survey, 401k participants feel that having professional assistance may help improve their financial situations, with the majority of participants (70%) saying they’d like personalized investment advice for their 401k plans.
“In our experience, people who use 401k investment advice tend to save more, are better diversified and stay the course during market uncertainty,” noted Catherine Golladay, senior vice president of participant services and administration at Schwab Retirement Plan Services, Inc. “Advice helps build confidence, too. Roughly three-quarters (74%) of the people we surveyed say they’d feel very or extremely confident making 401k decisions with the help of a financial professional. Only 44 percent would feel that same level of confidence on their own.”
The survey shows that participants also want help setting specific benchmarks for their retirement, including:
- Calculating how much money they need to save for retirement (46%)
- Determining at what age they can afford to retire (43%)
- Figuring out what their expenses will be in retirement (39%)
- Anticipating tax expenses in retirement (38%)
Financial Wellness Welcomed in the Workplace
The desire for help and guidance extends beyond 401k investing and retirement planning. The vast majority (85%) of respondents say they would be interested in using a financial wellness program if it were offered by their employer.
In fact, the survey found that people are already managing basic financial tasks at work, including paying bills (67%), taking care of personal financial issues (62%), managing their 401k (56%) and checking up on non-retirement investment accounts (41%).
“People look at retirement savings as part of their overall financial picture,” added Anderson. “Employers are in a unique position to address the needs of their employees more holistically. An increasing number of employers now recognize that a workplace financial wellness program can not only help alleviate the financial stress employees feel, but it can also increase retention, loyalty and engagement.”
Pocketbooks and Politics
Issues around personal finance could help drive the upcoming presidential election, according to the survey. An overwhelming majority (77%) of respondents consider the ability to save enough for retirement a major public policy issue.
Participants are split, though, on which presidential candidate will be better for their own economic security. Fifty-two percent say Democrat Hillary Clinton has the edge on pocketbook issues compared to Republican Donald Trump (48%).
In the survey, Clinton fared better with Millennials (60%) and women (61%) while Trump’s support came from Baby Boomers (55%) and men (55%).
