Guaranteed income solutions, savings gap
A total of 91% of participants expressed interest in in-plan guaranteed retirement income solutions, and 75% said they would likely keep assets in the plan if such an option were offered, reported J.P. Morgan Asset Management.
The survey also found declining confidence in Social Security, with only 35% believing their benefits will cover routine expenses. The finding has relevance for employers communicating about government retirement benefits.
The survey pointed to a persistent savings gap. It found 59% believe they should contribute more, 63% of retirees wish they had contributed more while working, and 53% do not know how much they need to save to retire securely. Automatic plan design features showed strong satisfaction results: 96% of participants who were automatically defaulted into their plans and 97% of those with automatic contribution escalation reported being satisfied, evidence supporting expanded auto-enrolment provisions.
The survey also linked financial stress to plan leakage: 45% of participants who took a plan loan did so to cover unexpected expenses or credit card debt, and those without emergency savings were almost 70% more likely to have taken a loan or withdrawal.
Workers are routinely undervaluing their workplace retirement plans because of how employers and plan sponsors communicate them — and that this is happening despite retirees saying they “couldn’t live without” that income, according to a previous report.
