Betterment at Work Survey Finds Less Than Half of US Workers Confident in Their Retirement Readiness

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Dec 06, 2023, 09:00 ET

Americans are withdrawing retirement funds early to address urgent financial priorities, making employee benefits even more critical for employers

NEW YORK, Dec. 6, 2023 /PRNewswire/ -- Betterment at Work, a leading provider of modern financial benefits for today's diverse workforce, today released a new survey on the state of retirement readiness across the U.S. workforce. The report, which tracks year-over-year trends from 2022, polled 1,000 full-time U.S. employees to examine how retirement readiness and financial wellness has evolved in the past 12 months, shifts in employee benefit preferences, and how these trends have changed within a shifting economic environment.

The U.S. is currently facing a national retirement crisis: over 56 million privately employed Americans lack access to retirement savings programs through employers, leaving retirement planning to individuals who may be unsure how much to save or struggle to balance this with other short-term priorities. Betterment at Work's findings help employers understand the root cause of retirement insecurity, and how stronger benefits packages can support the competing financial needs of workers.

Key findings from Betterment at Work's 2023 Retirement Readiness Report include:

Financial instability is on the rise, impacting retirement security:
- 31% of employees reported facing moderate to significant financial instability, up nine percentage points from 2022 (22%).
- Nearly four out of five workers (78%) said their finances cause them anxiety.
- Only about half (52%) of employees reported currently having an emergency fund — a seven percentage point drop from 2022.
- Nearly a third (30%) of workers tapped into their retirement savings over the past 12 months to pay for short-term expenses, and less than half (40%) feel confident that they'll be ready for retirement.
Student debt weighs heavy on employees as payments resume:
- Nearly half (49%) of borrowers stated that they did not feel financially prepared to restart student loan payments.
- 64% of borrowers said their student debt has impacted their ability to save for retirement, and 61% of those with children indicated they've put retirement plans on the backburner to pay for their child's education.
- 70% of workers say that their student loan debt causes them financial anxiety.
- 49% believe employers should play a role in helping employees pay off their student loan debt — this felt most strongly amongst Gen Z (71% of whom agreed), compared to just 27% of Boomers.
"Quiet quitting" and "rage applying" could be curbed through stronger financial benefits:
- 60% of employees said they would be enticed to leave their job by an employer offering better financial benefits than their current employer, a six percentage point increase from 2022 (54%).
- Nearly a third of workers (30%) have considered "quiet quitting" over the past 12 months, and about 1 in 4 (24%) have considered "rage applying."
- Yet, 72% of workers said better financial wellness benefits would reduce the chance that they consider "quiet quitting" or "rage applying" again in the future.

"Retirement security is under threat in America," said Sarah Levy, CEO of Betterment. "Our workforce is eager to save for the future, but they're facing competing priorities — from student loans to household expenses — that stand in the way of long-term financial security. This is an opportunity for employers to step in and lend a hand, reexamining their benefits packages and gauging whether current offerings are truly addressing the challenges standing in the way of employee retirement readiness."

Read or download the full report here .

Methodology
An online survey was conducted with a panel of potential respondents from September 1, 2023 to September 5, 2023. The survey was completed by a total of 1,000 respondents who are 18 years and older, and full-time employees. The sample was provided by Sago, a research panel company. All respondents were invited to take the survey via an email invitation. Panel respondents were incentivized to participate via the panel's established points program, regardless of positive or negative feedback. Participants were not required to be Betterment clients to participate. Findings and analysis are presented for informational purposes only and are not intended to be investment advice, nor is this indicative of client sentiment or experience.

Any links provided to other websites are offered as a matter of convenience and are not intended to imply that Betterment or its authors endorse, sponsor, promote, and/or are affiliated with the owners of or participants in those sites, unless stated otherwise.

This content from Betterment LLC and Betterment for Business LLC (d/b/a Betterment at Work) is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. The information contained is intended for educational purposes only and is not meant to constitute investment or tax advice. Advisory services provided by Betterment LLC, an SEC-registered investment adviser. Brokerage services provided to clients of Betterment LLC by Betterment Securities, an SEC-registered broker-dealer and member of FINRA/SIPC. 401(k) plan administration services provided by Betterment for Business LLC. Investments in securities: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. © Betterment. All rights reserved.

About Betterment at Work
Betterment at Work is a leading provider of 401(k)s and modern financial benefits for today's diverse workforce, empowering small-to-medium-sized businesses to attract and retain talent. Built on the same technology that powers our investment platform, Betterment at Work helps employees meet goals starting with retirement and going beyond, with customizable portfolios, debt management tools, easy-to-understand advice, and more. Our automation makes it easy to offer a better 401(k), and Betterment takes on the fiduciary responsibility for employee accounts, supporting personalized choice.
For more information, visit www.betterment.com/work.

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SOURCE Betterment at Work