Workers’ confidence about achieving retirement goals has risen sharply since last year, according to a new survey from Schwab Retirement Plan Services, and so has their appetite for financial advice and help from their employer.
The provider’s annual nationwide survey of 401(k) plan participants finds that more than half (53%) of 1,000 workers say they are very likely to achieve their retirement goals, compared to 37% in 2020–a positive sign after more than a year of financial turmoil and uncertainty caused by the pandemic. Meanwhile, the vast majority (91%) of respondents feel either very or pretty good about their financial health.
More positive news? The pandemic has caused more employees to prioritize financial savings and goals. Workers plan to save more in general (48%), increase their 401(k) contribution rates (36%), invest more outside of their 401(k) (35%) and pay off debt (34%).
“COVID really impacted the way workers approach finances,” says Catherine Golladay, head of Schwab Workplace Financial Services. “They are rethinking saving and spending, and they see more need for financial advice. For many, the most trusted personal finance resources available to them are those offered through their employer. This creates a great opportunity for employers to engage workers with education and drive awareness of benefits that can help them build financial security.”
Despite their optimism, employees are still facing challenges to saving for retirement, including market volatility (32%), unexpected expenses (29%), keeping up with monthly expenses (27%), education expenses (21%) and credit card debt (20%). That leaves more room for employers to step up and enhance offerings.
Specifically, the top retirement planning areas where participants want help are calculating a retirement savings goal (44%), receiving advice on how to invest a 401(k) (39%), figuring out how to create income in retirement (35%) and anticipating taxes in retirement (35%), according to the survey.
The pandemic solidified a multi-year trend toward more virtual retirement education which has proved popular with workers and employers, Golladay says. “We’ve also seen that employees prefer education on more holistic topics compared with only plan-specific education, which means employees are looking to their employers for help with their whole financial picture. The pandemic has taught us that workers prefer receiving education at the location of their choice, on the device of their choice, at the time of their choice. We don’t see this trend slowing down, and employers should embrace it.”
Although the pandemic has undoubtedly put workplace financial offerings in the spotlight, Golladay predicts these benefits will only become more important in the future–due in part to employees demanding them as the job market heats up and more employees consider leaving their employer.
“Employees are paying attention, which gives employers a great opportunity to promote current workplace financial offerings and also evaluate the future needs of their workforce,” she says.