The vast majority of workers recognize they aren’t saving enough for their post-work years, according to Willis Towers Watson’s 2022 Global Benefits Attitudes Survey. The consulting firm surveyed more than 9,600 U.S. employees during December 2021 and January 2022. According to the survey, the top three reasons employees cited for not saving more for retirement were paying off debts (36%); saving money for other reasons, such as holidays, purchasing a car or paying for education (28%); and not being able to afford to save more (27%).
What it means to HR leaders
The data is the latest to spotlight the significant challenge facing workers when it comes to retirement—as well as reiterate that HR and benefits leaders have work to do when it comes to helping employees.
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According to the survey, more than half of respondents (52%) are facing key risks to their retirement security. Those risks include saving less than 5% of salary and wanting to save more, borrowing from their 401(k) plan and withdrawing funds from their retirement plans. The survey also finds that 29% of respondents now expect to work past age 70 or never retire.
These findings come as soaring inflation—which rose 9.1% year-over-year in June—is undoubtedly hampering savings, and optimism, as well. Rising cost-of-living is changing financial priorities, leading some employees to decrease their retirement contributions.
The dire stats are a call to action for company leaders to talk about retirement priorities with their employees, tout financial wellness benefits and consider increasing company 401(k) contributions.
“Employees want help with saving for retirement,” says Jennifer DeMeo, managing director, integrated and global solutions, WTW. “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.”