September 8, 2021

Increased Optimism About Meeting Retirement Saving Goals

Saving for retirement is an important step that every Atlanta individual and family needs should prioritize, at the right time, to ensure there will be enough for the golden years. Unfortunately, when seismic events like an unexpected global pandemic, even the best-laid plans can be cast aside. The unfortunate result of the forced business closures and stay-at-home orders meant that unemployment increased at robust rates. Many were left in unexpected situations where retirement savings was likely not top of mind. Despite these conditions, it appears optimism about meeting retirement savings goals was not impacted. According to the Charles Schwab 2021 401(k) Participant Study – June 2021, optimism actually increased since before the pandemic by 15%. In addition, 29% of respondents believe their lifestyle in retirement will improve. These findings and others about attitudes and practices related to retirement savings are surprising given recent turmoil. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key study findings below.

About the Study

The study was conducted online between April 1 through April 15, 2021, and included responses from 1,000 plan participants between 21-70 years old. Participants all work for companies that have 25 or more employees, have access to a 401(k) plan, and are currently contributing. There were 100 additional Generation Z participants who also completed the survey.

Key Study Findings

• Current Financial Health – The financial condition of an individual or family plays a significant role in attitudes about retirement savings. This is an especially important consideration given the challenges created by the pandemic. The study found that 38% of participants have a very good financial situation, 53% pretty good and only 9% identify as being in a poor financial condition.
• Retirement Savings Obstacles – Saving for retirement can be especially challenging when meeting other immediate financial obligations. The study wanted to understand the most common retirement savings obstacles. It was found that 32% of respondents indicated stock market volatility, 29% unexpected expenses, 27% keeping up with monthly expenses, 21% saving/paying for children’s education, and 20% indicated paying off credit card debt.
• COVID Impact on Savings – Given the financial challenges presented by the pandemic, the study wanted to understand how retirement saving efforts may be impacted. Overall, it was determined that 23% of respondents will retire later than originally planned. Specifically, 32% of Generation Z participants (21-24 years old) will retire later than planned, 35% of Millennials (25-40 years old), 20% of Generation X (41-56 years old), and only 13% of Boomers (57-70 years old).
• Retirement Planning Assistance – The study also wanted to understand the types of retirement planning assistance which would be most useful for participants. It was found that 44% of respondents indicated calculating the amount needed for retirement, 39% specific advice on how to invest, 35% anticipating taxes during retirement, 33% identifying the age at which retirement is possible, 22% advice on how to catch up on retirement savings and 22% need guidance on managing expenses so more can be saved for retirement.
• Investment Confidence – While additional guidance and advice on retirement savings would be welcome by most it does not mean that confidence in current investment decisions is wavering. In fact, it was found that 40% of respondents are very confident in the investment decisions made on their own. However, when an investment professional is involved, the number increases to 56%.
• Top Employee Benefits – What type of benefits are offered to a prospective employee can influence the decision about where to work. The study wanted to understand the top expected benefits and whether a 401(k) plan would be included. It was determined that 86% consider a 401k a must-have benefit, 84% health insurance, 50% life insurance, 43% disability insurance, and 38% a health savings account.

Contact Us

The results of the study provide important insights for Atlanta employers and plan sponsors on the current issues and challenges facing participants. At the same time, it also highlights additional features/services participants would most benefit from. If you have questions about the information outlined above or need assistance with a 401(k)-plan audit, Wilson Lewis can help. For additional information call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.