What’s the key to starting retirement savings earlier? A recent survey of workers showed that it’s auto-enrollment in workplace retirement plans!
The recent quarterly Principal® Retirement Security Survey showed that 84% of respondents said they started saving earlier because they were auto-enrolled into workplace retirement plans. However, only about one-third of employers offer this option for employees.
The survey is timely as well, as Congress is trying to encourage employers to include auto-enrollment options in workplace retirement plans with legislation dubbed the Securing a Strong Retirement Act of 2020 pending. It’s timely, as the survey revealed – auto-enrollment encourages people to start saving earlier – which means more time to accrue retirement funds!
The survey also showed that of the employees who started saving earlier due to auto-enrollment, about 65 percent had increased savings rates and 47 percent had faster-growing plan assets.
Most workers surveyed by Principal said retirement planning was their top financial priority and – after the pandemic – about one-third said they planned to save even more.
Survey participants said they needed save about 11 percent of their paycheck to meet their retirement goals and they depend on their employers to help, via increasing their financial literacy and offering financial wellness resources.
Employer matching programs are another incentive, with about 47 percent of survey respondents saying it was their biggest influence when deciding to save more.
To learn more about the survey, visit: Principal Retirement Research.
The survey was conducted in the second quarter of 2021 and more than 2,000 workers and retirees – along with 236 plan sponsors – were interviewed on topics such as job turnover, financial concerns, economic outlook and more.
Did the pandemic change your your retirement vision or goals? Do you agree with this survey? We’d like to know.
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