U.S. workers are more confident in their ability to meet retirement savings goals as inflation subsides, a new consumer survey shows. Charles Schwab.
“[A]An online survey of 1,000 Americans with 401(k) retirement accounts showed anxiety about inflation and market volatility has declined since last year.
“43% of workers believe they are very likely to achieve their retirement savings goals, up from 37% in 2023,” the results explain. “Inflation and stock market volatility remain the biggest obstacles to saving for a comfortable retirement, although by 2024 Workers were slightly less concerned about these two factors.”
The amount workers think they need to save adequately for retirement remains at $1.8 million, about the same figure as last year’s survey. On average, workers expect the money to last about 23 years if they retire at age 65.
“Workers are more optimistic about their retirement prospects, and improving economic conditions tend to boost financial confidence, but that’s not the only factor,” Lee McAdoo, managing director of Charles Schwab’s retirement planning services unit, said in the report.
“We are seeing increased awareness of 401(k) investments and performance, which is a promising sign that employees are actively engaging with their accounts and developing knowledge to help them achieve their goals.”
Plan participants also appear to have a broad understanding of the types of investments active in their 401(k) accounts, with only 8% of respondents saying they did not know what investments were in their accounts. This is down from 12% in 2023 and is considered a positive sign of engagement.
More than two-thirds (69%) of employees say they know which investments to choose for their accounts, compared with 65% when the same question was asked in 2023. Becoming more and more confident.
“61% of people feel they need professional advice about their financial situation, up from 55% last year,” the report states. “In addition, more workers are interested in making the right decisions with the help of financial professionals. 401(k) investment decisions (55%, up from 49%) than making these decisions themselves (29%, up from 27%).”
Workers “are realizing that professional assistance has the potential to further accelerate their progress in saving for retirement,” said Marci Stewart, director of client experience at Charles Schwab Financial Services.
She said: “Self-guided education and computer-generated advice can provide solid financial wellness support, with a professional able to validate your plan and make more targeted recommendations, which is great for feeling more confident and financially secure in the long term. Precious.
