Empower participants to strengthen their retirement savings in the event of a pandemic
GREENWOOD VILLAGE, Colorado – (COMMERCIAL THREAD) – The COVID-19 pandemic, which has now lasted for almost two years, has proven to be a catalytic event that has helped change the way many Americans manage their money. Despite the economic uncertainty, workers invested more money in their 401 (k) plans in 2021 than the previous year as the effects of the pandemic rippled through their lives and the economy and changed their relationship with money.
This is just one of the revelations presented in a comprehensive new study of the savings behaviors of millions of retirement savers at Empower Retirement. The study, “Empowering America’s Financial Journey”, published today, examines the savings models of millions of Americans saving for retirement through company savings plans.
âAt the end of the day, what we are seeing is that there is very good reason to be optimistic in the way people have behaved with their retirement savings and others. financial needs during the pandemic, âsaid Empower Retirement President and CEO Edmund F. Murphy III. “However, there is also a full spectrum of demonstrated needs across all demographic cohorts, as people must make the optimal choices to meet their needs, support their families and achieve their goals.”
The study of retirement savers shows:
- Workers save more – and with confidence: A majority of workers (three in five) think they are saving enough in their 401 (k) plans. Compared to pre-pandemic levels (4Q19), average worker savings rates are higher (8.2% vs. 7.8%), and the percentage of eligible participants contributing to their 401 (k) plans also increased (85% vs. 84%).
- Generation Z is ahead: Gen Z represent the highest proportion of savers contributing to their workplace pension plans, their overall percentage being even higher than that of active baby boomers, who are fast approaching retirement. Remarkably, many Gen Z members have also said they’ve already started planning for retirement (beyond just contributing to a pension plan).
- Women become better savers as income increases: Women believe less than men that they save enough in their 401 (k) plans (49% vs. 64%). They also save a little less on average than men (7.9% vs. 8.5%), but there seems to be a positive movement to close this gap. Women save at higher average rates than men at income levels above $ 60,000.
- Automatic features are a good start, but commitment is needed: Plans with automatic enrollment help increase participation rates in workplace savings programs, but savers tend to stay disengaged with these savings plans after enrollment.
- Savings strategies are evolving: When available, nearly one in five 401 (k) participants diversify their taxable retirement savings by contributing Roth, and Roth contributors save at a significantly higher rate than those who do not contribute to Roth accounts (10, 2% versus 7.9%).
âWe are excited to provide real-time, customer-centric information with the goal of understanding what drives US savers; what advice are they looking for; and how we can deliver personalized and meaningful strategies that help savers replace their retirement income, âsaid Claudia Step, Senior Vice President and Director of Customer Experience.
Empower Retirement is the second largest pension registrar in the country by total membership.1 Through this study, Empower aimed to gain a better understanding of Americans’ financial journeys, including where they face obstacles and what financial strategies work best for them.
Empower’s inaugural study provides a comprehensive view of workers’ saving behavior and retirement readiness and provides insight into the behavior of approximately 4 million active members of company defined contribution plans in order to better understand their savings habits, their level of involvement in retirement planning and where they are located. ask for help. With access to millions of annual member transactions and interactions with pension plans, Empower is able to provide a single window into the state of Americans’ retirement finances.
The study goes beyond a quantitative look at the savings situation of Americans. It also assesses the attitudes, confidence and feelings of Americans related to retirement planning. In addition to examining the savings patterns of Americans participating in workplace savings plans, Empower also surveyed more than 2,500 Americans.2
Observing savings trends and patterns allows financial professionals to break down the needs of savers and design real strategies that could make a difference for savers’ retirement savings accounts, Step said.
âWe want to help savers overcome any real or perceived barriers that prevent them from maximizing their savings,â Step said. âWe believe that giving savers a holistic view of their finances and personalizing their financial roadmap builds confidence and ultimately leads to better savings rates and better results. ”
About Empowering Retirement
Empower Retirement, headquartered in Metro Denver, manages approximately $ 1.1 trillion in assets for over 12 million pension plan members3 and is the second largest registrar of pension plans in the country by total number of participants.1 Empower serves all segments of the employer sponsored pension plan market: 457 government plans; small, medium and large business customers 401 (k); 403 (b) non-profit entities; private label record keeping clients; and IRA clients. Personal Capital, a subsidiary of Empower Retirement, is a leading hybrid wealth manager.
For more information, please visit autonomiser-retraite.com and connect with us on Facebook, Twitter, LinkedIn and Instagram.
1 Ranking of the Pension & Investments 2020 survey with defined contributions in April 2021.
2 The survey was carried out by Sard Verbinnen & Co on behalf of Empower Retirement. This nationally representative online survey of full-time employees of for-profit companies with access to a defined contribution (DC) plan offered by their employer was conducted from September 21 to October 11, 2021, among A sample of 2,508 American workers between the ages of 18 and 70. The data has been weighted by age and sex to match the US Census distributions for adults aged 18 to 70 who are employed full time. All survey results represent weighted values ââto be representative of full-time employees in for-profit companies, regardless of gender and generation.
3 As at September 30, 2021. Information refers to the activities of Great-West Life & Annuity Insurance Company and its subsidiaries, including Great-West Life & Annuity Insurance Company of New York and GWFS Equities, Inc. Total assets GWLA’s consolidated according to (AUA) were $ 1.125 billion. AUA is a non-GAAP measure and does not reflect the financial stability or soundness of a business. GWLA’s statutory assets are $ 76.1 billion and liabilities are $ 73.1 billion. GWLANY’s statutory assets total $ 4.2 billion and liabilities total $ 3.3 billion.
To learn more about how we are empowering plan sponsors and their members to be more involved in their retirement plans than ever before, call us at 800-719-9914.
Securities, when presented, are offered and / or distributed by GWFS Equities, Inc., a member of FINRA / SIPC. GWFS is a subsidiary of Empower Retirement, LLC; Great-West Funds, Inc .; and registered investment advisor, Advised Assets Group, LLC. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice. RO1939518-1121