What You Need to Know
- Fifty-three percent of 401(k) plan participants expect to achieve their retirement goals, Schwab's annual survey found.
- The stress created by the pandemic highlighted the importance of financial wellness and trusted advice.
- Many workers want more guidance on retirement planning and savings, and many are looking to other workplace benefits that support financial security.
Employees’ confidence about achieving their retirement goals has risen sharply since last year, and so has their appetite for financial advice, Schwab Retirement Plan Services reported this week.
Schwab’s annual nationwide survey of 401(k) plan participants found that 53% expect to achieve their retirement goals, compared with 37% in 2020. On average, plan participants believe they will need to save $1.9 million for retirement, the same amount as in 2020.
Ninety-one percent said their financial health is pretty good.
“We experienced tremendous stress in our work and home lives this past year that highlighted the importance of financial wellness and the value of trusted advice,” Catherine Golladay, head of Schwab Workplace Financial Services, said in a statement.
“Now, as we emerge from the pandemic, employers have an opportunity to engage employees with education, advice and a range of other workplace benefits to help them build financial security and increase satisfaction at work.”
Logica Research conducted the survey in the first half of April among 1,000 401(k) plan participants ages 25 to 70 who work for companies with 25 or more employees that have 401(k) plans and currently contribute to them. An additional 100 Generation Z plan participants also completed the survey.
Workers Want More Help
Many participants in the survey reported that the pandemic had changed the way they approach saving and spending. Here are the main things they plan to do:
- Save more in general: 48%.
- Increase their 401(k) contribution rate: 36%.
- Invest more outside their 401(k) plan: 35%.
- Pay off debt: 34%.
Despite their optimism, many participants also face obstacles to saving for retirement: stock market volatility, unexpected expenses, keeping up with monthly expenses, education expenses and credit card debt.
After more than a year of the pandemic, 23% said they would have to delay retirement. Six in 10 think their financial situation warrants professional advice to address these kinds of challenges, compared with half in the 2020 survey.