Many people who have been able to remain healthy and working during the COVID-19 crisis are increasingly focused on saving money. Insights from a recent survey hold important clues for how retirement plan sponsors can support their efforts.
Saving for Retirement Tops the List
Financial stress set off by the COVID-19 pandemic has driven focus to saving money. Working and retired Americans, surveyed by Harris Poll on behalf of Empower Retirement and Personal Capital, put “saving for retirement” and “paying off personal debt” at the top of their financial goals. As 401kSpecialist reports, it seems that the pandemic has been a catalyst for saving:
- 83% of respondents said they want to minimize worrying about their finances this year, mainly through increased savings.
- 52% of respondents said they will seek more guidance when it comes to their financial strategies.
- 33% said they are more likely to work with financial professionals as opposed to 24% at the onset of the pandemic.
- 41% of survey respondents said they plan to spend less money on non-essential items.
- 38% percent plan to save more of each paycheck they receive.
Healthy Retirement Plans
Now more than ever, plan sponsors have an important role to play, communicating with employees about the retirement plan. Financial Wellness reminds us that an active plan will have increasing participant rates and contributions. Do your employees and participants know how to enroll and adjust contributions?
As you step up communications, remember, older employees may be confronting disruptions on the path to retirement–and employees of every age will benefit from increased awareness of how even modest contributions to the retirement plan add up.
Ellevest shares this encouragement about taking financial goals step by step—and not stopping:
If we learned anything last year, it’s that plans change. Goals that seemed important may suddenly need to shift. But that doesn’t mean they go away. Instead, they’re a work in progress. Sometimes — like, say, when there’s a giant worldwide pandemic that lasts a year and a recession that’s hitting women harder — you take a step back. Sometimes you’ll need to press pause. Sometimes you score a small win. But still, a work in progress….I’s time to look at where you’re at now and what the next small win for your money goals could be.
Since reducing financial stress contributes to increased workplace productivity, take every opportunity to encourage participants to access the workshops, information and tools offered by the plan’s service providers.
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