When most workers open a defined contribution (DC) retirement plan, the emphasis is on long-term thinking.
A new LIMRA Secure Retirement Institute study recommends that plan sponsors might want to encourage more near-term thinking and promote achievable savings goals for their workers.
Despite their efforts to save for the future, Americans are behind in their retirement savings. On the positive side, 8 in 10 workers who have access participate in their employer’s DC plan.
Less encouraging is that half of Boomers and 60 percent of Gen X and Millennials are not saving at least 10 percent of their income.
The study focused on attitudes and engagement of different generations of workers and found that most people don’t know how much they should save. Only 3 in 10 Millennials said they knew how much money they should set aside for retirement while only 4 in 10 Gen X and Boomer workers said they knew the right amount.
This uncertainty is likely contributing to a lack of retirement confidence. When asked how confident they are about living the lifestyle they want in retirement, only 40 percent of workers age 60+ say they are. Among those under age 60, confidence never goes higher than 38 percent.