In The Worksite

Workers & Employers Under Pressure

Workers seeking less lavish retirement to maintain financial health and lifestyle

Principal® survey shows retirement goal “reset” for many U.S. workers amid recent market volatility and inflation. View full survey results here

(DES MOINES, Iowa) – American workers cite saving enough for retirement as their top financial priority in a new survey by Principal Financial Group®, replacing dreams of a lavish retirement with simpler goals of maintaining the current standard of living amid ongoing market volatility and inflationary pressures.

The Principal® Retirement Security Survey included nearly 1,000 consumers and 215 plan sponsors in the United States. According to the findings, a considerable percentage of workers (71%) said their key goal in retirement is “maintaining my standard of living,” while less than half (44%) cited splurging periodically in retirement as a priority. The biggest concerns workers say they have in retirement, in order, are maintaining a healthy lifestyle, enduring market losses, outliving savings, and meeting daily expenses.

“For most Americans, living comfortably with the occasional splurge on their favorite activities or travel destinations is the ultimate goal in retirement,” said Sri Reddy, senior vice president, Retirement & Income Solutions at Principal. “In the current environment of high inflation and potentially lower investment returns, we are seeing something of a retirement reset among U.S. workers. As a company, we are focused on providing the solutions people need to help feel secure in their planning for their post-working years.”

Current Stressors for Retirement Savers

Unfortunately, 40% of those surveyed said they feel behind in their retirement savings. Like most Americans, this group has likely felt the effects of recent stressors from inflation to market volatility and the ongoing impacts of the COVID-19 pandemic. In fact, surveying showed inflation, the economy, and the future of the nation – alongside mainstay concerns such as healthcare and aging parents — are among the top stressors for U.S. workers.

Financial Health: Resources Available, But Often Neglected

Retirement planning remains a focal point for 40% of workers, who list the activity as their top financial priority — followed by reducing debt (37%) and updating or creating a will, trust, or estate plan (30%). This financial focus is especially true for workers who are making career moves in the current labor market. When considering a job change, “benefits that will help my financial well-being” ranked third among top considerations (58%), behind “competitive salary” (79%) and a “good culture where I feel valued” (64%).

For most Americans, living comfortably with the occasional splurge on their favorite activities or travel destinations is the ultimate goal in retirement...

As a result, plan sponsors appear focused on providing options to help meet current and future employees’ retirement planning needs. A majority of plan sponsors (88%) agree their organization is responsible for ensuring employees have access to benefits that help maintain their financial well-being. Meanwhile, 87% agree providing the right financial tools, resources, and education can help employees better prepare for retirement.

There may be a disconnect, however, with how well workers actually utilize the programs offered by their employers. Surveying showed only 35% of workers participate in financial wellness programs, and nearly half (46%) don’t even know whether they are available.

“While there are many financial factors outside of our control, there are individual decisions both in work and our personal lives that can help us maintain financial security,” Reddy said. “The good news is that employers can use these moments of focus to help increase workplace retirement plan awareness, engagement, and outcomes among participants.”

To learn more about how workers, retirees, and plan sponsors are navigating retirement security today, visit the Principal retirement insights webpage, here.

 

 

 

About the Principal® Retirement Security Survey
Principal conducts periodic surveys with customers, employers, financial professionals, and consultants to gain insights into timely topics. The survey findings reported here explore plan sponsor and consumer concerns and actions surrounding saving for retirement as well as financial behaviors. More than 998 U.S. consumers and 215 retirement plan sponsors who have at least one financial product or service with Principal participated in the study in the month of March.
About Principal Financial Group®
Principal Financial Group® (Nasdaq: PFG) is a global financial company with 18,500 employees1 passionate about improving the wealth and well-being of people and businesses. In business for more than 140 years, we’re helping more than 54 million customers[1] plan, protect, invest, and retire, while working to support the communities where we do business, and build a diverse, inclusive workforce. Principal® is proud to be recognized as one of America’s 100 Most Sustainable Companies[2], a member of the Bloomberg Gender Equality Index, and a Top 10 “Best Places to Work in Money Management[3].” Learn more about Principal and our commitment to building a better future at principal.com.
[1] As of April 30, 2022
[2] Barron’s, 2022
[3] Pensions & Investments, 2021