Employees May be More Optimistic than We Think

A recent survey of retirement plan participants shines a light on their positive perspectives — which can help inform plan changes you may be considering.

Released in October of 2021, American Century’s 9th Annual Survey of Retirement Plan Participants found that more workers are optimistic about their futures in 2021 than they were in 2020. Not surprising, following more than a year of dealing with the pandemic, participants are now more positive about saving, risk and expectations. Because it’s the start of a new year, now may be an opportune time to discuss the findings with you plan advisor as you consider any plan design changes or adding features that may help improve retirement outcomes for your employees.

Optimism is trending up

• Fifty-two percent of survey respondents expect their retirement lifestyle to be about the same as it is now.
• Three in 10 expect their retirement lifestyle to be better than it is now.
• More Millennials expect their retirement lifestyle to be a little or much better than it is now.

However, concerns about running out of money in retirement are felt by workers of all generations and regrets about saving are still felt by many:

• Not saving enough was the #1 regret (especially, as you might expect, among those with less savings)
• Those with more assets are more likely to regret not taking more time to enjoy life.

As in past years, the overwhelming majority of workers see the value of their retirement plan benefits. Many welcome automatic features to give them the “kick in the pants” or “slight nudge” they are looking for from employers:

• More than 6 in 10 support auto enroll and annual auto increases
• Four in 10 say retirement plans should be automatic for all
• Ninety percent of respondents say their retirement plan is a top benefit
• Two in 3 prefer an employer match over a raise, regardless of percentage
• Two in 3 support auto enroll at 6%
• Three in 4 would leave money in the plan if it had specific investments for retirement withdrawals
• Seven in 10 need a little guidance on withdrawals for retirement
• More than half are interested in environmental, social and governance (ESG) funds
• Two in 3 would be more interested in ESG funds if performance was comparable
• Market risk is a top concern, although only slightly more than longevity.

To download a presentation of American Century’s survey findings, go to: https://tinyurl.com/pte2v3ka.

For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

©2021 Kmotion, Inc.