Mon, 11 October 2021 | retirement
The last 18 months have had a significant impact on businesses, the economy and society — and nearly eight in ten U.S. workers are reevaluating what is important in life, including finances, their career and retirement, according to Lincoln Financial Group’s 2021 Retirement Power® study.
People participating in an employer-sponsored retirement plan are especially motivated — more than two out of three (69%) say they intend to save more in their retirement plan. Participants are not the only people looking to invest in their futures, though, as nearly half of those who have access to workplace retirement benefits but do not currently participate, plan to start contributing. This makes now the perfect time for employers to celebrate National Retirement Security Month and take steps to help their employees achieve the retirement they envision.
“It is clear that while the COVID-19 pandemic affected everyone to different degrees, what the majority of workers have in common is their focus on improving their financial wellness,” said Sharon Scanlon, senior vice president, Customer Experience and Producer Solutions, Lincoln Financial Group. “People are looking to their employers now for resources and education that will help them turn those good intentions into action so that they can achieve financial security.”
Retirement plan participants are more likely to turn to their employer for information about financial topics, and employers can help employees lower stress and improve retirement readiness by focusing on three core areas: financial wellness, education and retirement income security.
Competing priorities: The need for Financial Wellness
More than three quarters (76%) of those surveyed reported having at least three competing financial priorities, which can make it difficult to balance the needs of today with saving for the future. It can also increase stress, so it is no surprise that more than nine in 10 employees report feeling stressed, which can also impact job performance.
Offering financial wellness resources can help — in fact, 86% of employees who use financial wellness tools say they see a positive impact as a result. Seeing a holistic view of their financial health, including spending, saving, debt and protection, can help them better plan for and achieve multiple financial goals.
The importance of education
Education and tools can help employees make sound financial decisions, and also drives their overall confidence and engagement. Savers who use employer-provided financial resources are more than twice as likely to have increased the amount they contribute to their retirement plan in the past year.
However, eight in 10 employees say there is more they want to understand when it comes to certain financial topics including investment options within their retirement plans. It is critical for employers to provide access to and awareness of the right tools that can help employees understand how to make better decisions when it comes to saving for retirement, including one-on-one retirement consultations, retirement income projections, calculators and more. With 60% of participants saying they are saving less than needed to be on track for retirement, these are all important levers to help them understand how and why to save more.
As open enrollment season approaches, employers can also consider what additional materials could be helpful for employees as they look at their holistic financial picture and benefits package.
Planning ahead for a secure retirement
As employees continue to endure the uncertainty and financial anxiety onset by the pandemic, their interest in retirement income products has dramatically increased — currently 72% percent of employees are interested in what guaranteed income products can mean for their financial futures, and nearly half say they would increase their contribution if guaranteed income were offered.
“After a year filled with the unexpected, people are looking for something they can rely on,” said Ralph Ferraro, senior vice president, Retirement Plan Products and Solutions, Lincoln Financial Group. “In-plan guaranteed income solutions can help provide that, giving people the confidence that they will not outlive their retirement savings.”
Source: Lincoln National