US workers believe they need to save about $1.8 million for retirement as inflation continues to fuel fears about saving. According to one survey From Charles Schwab.
That estimate is up from $1.7 million last year, according to the survey, with 37% of respondents saying they are very likely to reach that number, down 10 percentage points from last year. .
A survey of 401(k) participants found that 62% of workers see inflation as a challenge to saving for a “comfortable retirement”, up from 45% last year, and 42% They said stock market volatility was a hindrance (compared to last year). 33 percent. About 78% said both inflation and stock market volatility are affecting their spending and saving habits, and 36% said they plan to delay retirement given these circumstances.
Having a 401(k) plan is becoming a requirement for potential employees. Eighty-eight percent said it was an “essential benefit,” and three out of four respondents said they would turn down a new job if they weren’t offered a 401(k) plan.
Bryan Bender, head of Schwab Workplace Financial Services, said: “While many workers are looking to cut spending, some costs are unavoidable and certain areas of finance are taking a hit. there is,” he said. “Despite these challenges, saving for retirement remains a priority for workers, who have maintained their 401(k) savings rate and have largely maintained their 401(k) investments over the past year. .”
More workers are now hiding their retirement benefits. Sixty-eight percent reported keeping money in savings accounts, up from 61% last year. 47% reported investing in an IRA, compared with 33% last year. Thirty-eight percent reported investing through brokerage accounts, up from 29%.
The study also notes the role of artificial intelligence (AI) in financial planning and that 95% of workers are still more likely to receive guidance from human experts than computer-generated advice. This advice played a major role in employee decision-making, with professional help increasing employee confidence in financial decisions from 27 percent to 49 percent.
A majority of workers, 73%, said they wanted personal advice on their 401(k) plans, and 39% said they received such advice through their work plan.
The survey was conducted at a time of ongoing inflation nationwide.
Federal Reserve Chairman Jerome Powell said last week that the Fed still has a “long way to go” to get inflation back to its 2% target. In July, the Fed raised its benchmark interest rate to its highest level in 22 years in an effort to curb inflation.
The online survey, conducted by Logica Research, asked 1,000 US 401(k) participants from April 19th to May 2nd. In addition to being 401(k) respondents, the survey participants worked for companies with 25 or more employees and were between the ages of 21 and 70. . The study says the data were self-reported by study participants and were neither validated nor validated.
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