While decreases in discretionary spending during the pandemic might seem like they would have bolstered retirement savings, new research from WTW (Willis Towers Watson), a global advisory firm, suggests that the retirement outlook is dire for many Americans. The 2022 Global Benefits Attitudes Survey, which looked at 9,600 workers at various American companies, found that increasing numbers of older employees are planning to wait to retire until long past the standard age of 65: In fact, 36% of workers over 50 say they’ll work until they’re at least 70.
Across the entire workforce, the number of employees anticipating late retirement is slightly lower, with 30% of people saying they’ll likely work until they’re at least 70, if they retire at all. A bit part of their motivation may be a lack of retirement savings; the same survey found that nearly 70% of all workers are not saving enough money for retirement, focusing instead on using their money for financial goals like handling debts. Nearly 40% of workers under the age of fifty are saving less than 5% of their income for retirement.
Previous studies have also suggested that workers are struggling to accrue adequate retirement funds, including one 2021 survey which found that many workers grossly underestimate how much money they will need to retire, with the average Millennial saying $300,000 is enough to retire on. In fact, most experts put the actual figure at $1.8 million.
In a time of financial pressures, many workers are turning to employer-provided retirement plans for stability, with almost three-quarters of all workers focusing their retirement savings on employer plans, the WTW survey found. Meanwhile, more than half of all employees said they’d be interested in paying more out of their salaries for better retirement benefits.
Jennifer DeMeo, managing director of Integrated & Global Solutions at WTW, says, “Employees want help with saving for retirement. So, it’s imperative for employers to ensure their Total Rewards programs provide not only benefits that meet employees’ needs but also the employee engagement resources, tools and technology to make informed decisions about saving for retirement. When their financial wellbeing is strong, employees are more likely to be engaged and productive and less likely to leave their organization.”