Employees want to save for retirement, but wages and debt remain obstacles
- Most employees don't think they're prepared for retirement, according to business services firm Willis Towers Watson (WTW). In its latest "Global Benefits Attitudes Survey," released in November, 50% of global workers told WTW, "I often worry about my future financial state," while two-thirds said they felt their future financial state would be worse off relative to that of their parents' generation. The issue impacts all generations, dispelling any myths that it is centered on any one generation, a new report notes.
- WTW found that 68% of employers are making retirement security a priority, up from 46% in 2013. Central to the problem is that many workers are living from paycheck to paycheck due to stagnant wages and growing debt, the firm said.
- More than 60% of global employees in the survey said they rely on employer-sponsored plans as the primary means of saving for retirement, and 3 in 5 workers would rather pay for a more generous retirement benefit than a better health plan.
The issue of retirement is especially tough for younger generations; a report from the National Institute on Retirement Security (NIRS) found that two-thirds of millennial respondents had not saved a single dollar for retirement savings. A separate study found that millennial women are behind the savings pace needed to prepare for retirement compared to their male counterparts.
The data is sobering, since millennials make up the largest segment of the workforce and will need even greater savings for their post-employment years than their parents' generation. Even a fraction of boomers are working well into their 70s — some because they want to, others because they have no other choice financially. A September 2017 WTW study showed that employers allocate on average 70% more of their benefits spend to healthcare benefits relative to retirement benefits.
Some companies say they will use savings from the recent tax bill to increase contributions to 401k plans and other employer-sponsored retirement accounts. Other employers are helping employees free up money to save for retirement by helping them manage expenses and debt, often through financial well-being programs. Any help employers can provide workers will make saving for retirement less burdensome.