EBRI Survey: Confidence Levels Highest Among Retirees, Workers with Retirement Plans
Things seem to be looking up for American retirees these days. Two groups are most likely to feel confident about their retirement readiness: retirees, who report feeling more secure in their ability to live comfortably in their retirement years, and workers with a retirement plan, whether it’s a defined contribution (DC) or defined benefit (DB) plan, or an individual retirement account (IRA).
In fact, 79% of retirees say they feel very or somewhat confident that they have enough savings to live well in their retirement years. One-third (32%) of those feel very confident.
Additionally, workers who have a retirement plan, whether through their employer or otherwise, are more likely to feel confident about having enough money to sustain them throughout their post-working years. Typically, they have saved more, taken more action to prepare for retirement, and feel less stressed overall about their retirement readiness than those without access to a retirement plan. It goes to show that having a vehicle for savings is a much stronger catalyst for retirement preparation — a boon for plan sponsors who are helping employees to make the most of their retirement benefits.
These are just some of the key findings from the 2017 Retirement Confidence Survey from the Employee Benefit Research Institute (EBRI). Now in its 27th wave, the RCS is the longest-running survey of its kind in America, according to EBRI.
Financial Wellness Can Help Boost Peace of Mind
Underscoring the importance of holistic financial wellness programs in the workplace — a trend that’s catching on with many employers — roughly half of workers EBRI surveyed say that programs focused on retirement planning (53%), financial planning (49%), or healthcare planning (47%) would help increase their productivity at work. About 30% of workers report worrying about their personal finances while on the job, and more than half say they believe they would be more productive at work if they didn’t have these concerns.
As such, implementing a comprehensive financial wellness program that simplifies key concepts like budgeting, long- and short-term savings goals, and investing, and that keeps employees on track toward those goals can go a long way toward creating greater peace of mind and a happier, more productive workforce.
Matching Motivates Saving
Employer matching contributions and automatic payroll deductions are two great ways to motivate employees to save for retirement. EBRI found that 73% of workers not currently saving say they would be more likely to do so if their employer offered a match. Further, two-thirds of non-savers say they would be incentivized to set aside money for retirement via automatic payroll deductions of 3% to 6% of salary, if they had the option to stop or change them.
Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com
© 2017 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.
About the Author, Phil Scott has over two decades of experience in the Financial Services Industry. Phil is a Registered Representative with LPL Financial and Investment Advisor Representative with Advantage Investment Management (AIM).
This information is provided as a courtesy and should not be considered specific advice or recommendations for any individual. Please consult your tax professional before taking any specific action. Neither LPL Financial nor Advantage Investment Management (AIM) are engaged in the rendering of tax or legal advice.
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