The last 18 months have had a significant impact on
businesses, the economy and society — and nearly eight in ten U.S. workers are
reevaluating what is important in life, including finances, their career and
retirement, according to Lincoln Financial Group’s (NYSE: LNC) 2021 Retirement
Power® study.
People participating in an employer-sponsored retirement
plan are especially motivated — more than two out of three (69%) say they
intend to save more in their retirement plan. Participants are not the only
people looking to invest in their futures, though, as nearly half of those who
have access to workplace retirement benefits but do not currently participate
plan to start contributing. This makes now the perfect time for employers to
celebrate National Retirement Security Month and take steps to help their
employees achieve the retirement they envision.
“It is clear that while the pandemic affected everyone to
different degrees, what the majority of workers have in common is their focus
on improving their financial wellness,” said Sharon Scanlon, senior vice
president, Customer Experience and Producer Solutions, Lincoln Financial Group.
“People are looking to their employers now for resources and education that
will help them turn those good intentions into action so that they can achieve
financial security.”
Retirement plan participants are more likely to turn to
their employer for information about financial topics, and employers can help
employees lower stress and improve retirement readiness by focusing on three
core areas: financial wellness, education and retirement income security.
Competing Priorities: The Need for Financial Wellness
More than three quarters (76%) of those surveyed reported
having at least three competing financial priorities, which can make it
difficult to balance the needs of today with saving for the future. It can also
increase stress, so it is no surprise that more than nine in 10 employees
report feeling stressed, which can also impact job performance.
Offering financial wellness resources can help — in fact,
86% of employees who use financial wellness tools say they see a positive
impact as a result. Seeing a holistic view of their financial health, including
spending, saving, debt and protection, can help them better plan for and
achieve multiple financial goals.
The Importance of Education
Education and tools can help employees make sound financial
decisions, and also drives their overall confidence and engagement. Savers who
use employer-provided financial resources are more than twice as likely to have
increased the amount the contribute to their retirement plan in the past year.
However, eight in 10 employees say there is more they want
to understand when it comes to certain financial topics, including investment
options within their retirement plans. It is critical for employers to provide
access to and awareness of the right tools that can help employees understand
how to make better decisions when it comes to saving for retirement, including
one-on-one retirement consultations, retirement income projections, calculators
and more. With 60% of participants saying they are saving less than needed to
be on track for retirement, these are all important levers to help them
understand how and why to save more.
It is clear that while the pandemic affected everyone to
different degrees, what the majority of workers have in common is their focus
on improving their financial wellness...
As open enrollment season approaches, employers can also
consider what additional materials could be helpful for employees as they look
at their holistic financial picture and benefits package.
Planning Ahead for a Secure Retirement
As employees continue to endure the uncertainty and
financial anxiety onset by the pandemic, their interest in retirement income
products has dramatically increased — currently 72% percent of employees are
interested in what guaranteed income products can mean for their financial
futures, and nearly half say they would increase their contribution if
guaranteed income were offered.
“After a year filled with the unexpected, people are looking
for something they can rely on,” said Ralph Ferraro, senior vice president,
Retirement Plan Products and Solutions, Lincoln Financial Group. “In-plan
guaranteed income solutions can help provide that, giving people the confidence
that they will not outlive their retirement savings.”
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