When it comes to saving for retirement, most employees are eager for more support, and they want their employer to automatically increase their savings rate.
A survey of workplace retirement plan participants released on Thursday by State Street Global Advisors confirmed previous findings by the company about the need for employers to provide expert guidance and play an active role in helping make saving for retirement easier:
- 74% of employees surveyed want clear examples that will show them how their savings will pay off in the future
- 71% want employers to increase their savings rate by 1% automatically each year; and
- 62% of employees 25 and younger said they want their employers to show them how to spend less so they can save more, compared to 53% of all employees surveyed
“Our study leaves no doubt employees want help in saving more and they want it to be as easy as possible,” Fredrik Axsater, managing director and head of global Defined Contribution for SSgA, said in a statement. “Many of our plan sponsor clients have expressed some hesitancy about automatically increasing savings rates for their employees. We hope this survey will help convince employers to prioritize savings adequacy in 2013.”
Survey respondents indicated that they want advice and guidance from experts when making decisions about their investments and their overall retirement readiness at critical inflection points like enrollment, job transition and exiting their plan at retirement. Axsater highlighted the importance of providing employees with simple, straight-forward tools that will help them determine how much to save and how to invest wisely.
SSgA’s survey points to an emerging group of younger investors categorized as “Generation DC.” This group reported an ongoing desire to learn more about retirement readiness despite the fact that they are more likely to be automatically enrolled into their defined contribution retirement plan than their older peers; indicating that automation is not an indicator of inertia when it comes to saving for their future.
- 82% of employees 25 and under stated they are on track to save enough to meet their retirement goals, while the average of all employees surveyed was only 63%;
- 48% of employees 25 and under stated that they had increased their savings outside of the workplace in the last 12 months, while the average of all employees surveyed was only 37; and
- 50% of employees 25 and under indicated a company-sponsored buddy program that encourages people to help other people save, while the average of all employees surveyed was 28%.