
Almost every employee plans to have a safe financial future, and so, they work hard to earn enough and save adequately to live comfortably retiring from their job. Despite having strong plans and ideas to save enough for their retirement funds, only 37% feel that they can actually achieve their financial goals.
Over the years, employees have agreed that their savings alone is not enough for their retirement funds, and they wished their employers contributed enough towards their retirement benefits and plans. With this, they said, their financial worries also reduced, thus, helping them overcome one of the major health concerns – Stress, thus, helping them lead a life of holistic wellness in their older age.
American Century Investments conducted a survey and evaluated many factors contributing to the retirement plan design of employees.
American Century Investments – Financial Wellness Survey
American Century Investments and Charles Schwab conducted a survey and evaluated many factors contributing to the retirement plan design of employees. The 8th Annual Survey of Retirement Plan (401K) Participants was conducted in March 2020 with almost 1,508 US employees.
They found that the 401(k) plan employees had two primary concerns for their retirement plans –
- Having enough saved money
- Market trends and risk
Almost 44% of the survey respondents said that they were highly concerned if they have enough money saved for their retirement funds, 33% were worried about the stock market trends and risk affecting their savings, while 25% was worried about their job security. While the fear was around 41% in 2017, it has increased to 44% in 2020.
On average, the employees thought that they needed that at least $1.9M as their retirement savings, and only 37% were confident about reaching their retirement fund goals. While 49% were somewhat likely to achieve their goals, 14% were not very sure of accomplishing their financial retirement goals. Almost 21% said they would plan their retirement later than they had originally planned to save more money.
401(k) Retirement Plan Actions
With the economic downfall owing to the COVID-19 outbreak, it has been emphasized to seek financial guidance to make the employee action more pronounced with their 401(K) retirement plans. While 40% of the employees were ready to get paid financial advice, another 40% said they would spend lesser and preferred software technology for their finances, and the remaining 20% did not prefer to pay for any kind of financial advice.
Almost 25% of the employees say they have spoken to a financial consultant since the coronavirus pandemic for guidance. However, only 67% have taken serious action with their 401(k) account, while 33% have not taken any action.
Of the 67% who have taken 401(k) account action –

- 26% – Readjusted their account
- 22% – Increased their contributions
- 17% – Increased their stock/equity funds
- 13% – Decreased their stock/equity funds
- 11% – Reduced contributions
- 5% – Stopped contributions
What Employers Can Do For Employee Financial Wellness?
It was not surprising that employees were looking out to their employers as a reliable source to offer financial advice and assistance, usually in the form of financial wellness programs. Almost 75% of the respondents wished their employers offered holistic financial assistance for them to make wiser financial decisions. 66% of the employees felt that their employer must start a retirement plan, and they would enroll under it automatically. 70% of them thought the employer-sponsored retirement plan must start at a rate of 6%, and increase annually.
Apart from the 401(k) plans, making Health Savings Account (HSA) contributions are a great solution for the employers to help with their employee’s financial concerns. The survey reported that almost 77% of the respondents were having an employer-sponsored health savings account (HSA), and 45% of them make use of it.
Additionally, employers need to put in the efforts to understand employee emotions towards their retirement plans and finances, irrespective of any limitations, and embrace the requirements of their workforce. Be it by offering employee wellness programs to help them achieve holistic wellness and save their healthcare costs in the long run, by offering cash rewards or reimbursements, by evaluating the other ESG (environmental, social and governance) factors, or by offering relevant employee benefits and services, employers can do a fair bit to help their employees plan their investments and economics for a financially smooth retired life.