Dive Brief:

• Most U.S. workers at mid- and large-sized companies lack confidence in their ability to retire within the age range — typically 65 to 67 years of age, per the Social Security Administration — recognized by the federal government, according to a recent survey by Economist Impact and TIAA subsidiary Nuveen.
• The survey found that 57% of respondents felt this way about their retirement prospects, and the sentiment was especially strong among Black, Hispanic and Asian workers compared to White workers, the firms said. Generation Z respondents also were less satisfied with retirement benefits and less confident in their prospects than their older counterparts.
• About one-third of respondents said their employers clearly communicated information about retirement plans and even fewer said they “strongly agree” they had clarity about how much retirement income they would receive. The study showed employers have opportunities to improve benefits selection beyond retirement, including in areas such as tuition assistance, family planning and family care.
  

Dive Insight:

The spectrum of research on retirement benefits has revealed some potentially troubling trends within the past few years. Perhaps chief among these is the share of 401(k) plan participants taking hardship withdrawals, which Bank of America said increased 36% year over year in August 2023.

A large disparity has emerged between the amount employees say they believe they will need to retire comfortably and their actual savings to date, according to a recent Northwestern Mutual study. For example, the firm found that workers ages 70 and above expected to need about $936,000 saved on average, but had only saved about $114,000.

Financial anxiety is also felt unevenly across demographic groups, according to a 2023 Transamerica Center for Retirement Studies report. Women in the study had substantially less 401(k) savings than men, while White and Black respondents were most reliant on Social Security benefits as a primary source of retirement income compared with Hispanic, Asian American and Pacific Islander respondents.

Similarly, Economist Impact and Nuveen found that different employee demographics reported varying degrees of ease when attempting to use their employee benefits. People of color in the firms’ study were less likely to say they “strongly agree” that employers made it easy to use benefits.

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