Americans with employer-sponsored retirement plans are revamping how they’re saving for retirement because of inflation, according to a recent survey.
Forty-five percent of 401(k) plan participants now view inflation as the top obstacle to saving for retirement, Schwab says it found in a survey of 1,000 plan participants 21 to 70 years old who were actively employed by companies with at least 25 employees and participated in their company’s 401(k) plan.
That’s ahead of monthly expenses, seen by 35% of the respondents as the main obstacle, as well as market volatility and unexpected expenses, cited by 33% in each case, according to the survey findings.
As a result of inflation and market volatility, meanwhile, 79% of the respondents are changing how they save and spend, Schwab says.
For example, 34% are reducing how much they buy, 32% are buying cheaper alternatives and 21% are paying off debt more slowly than before, according to the survey findings.
But 33% are nonetheless still saving less and 30% are still spending more, Schwab says.
At the same time, 20% of respondents are saving less for emergencies, according to the survey findings.
In addition, 44% have changed their 401(k) investments, while 15% are contributing less to their 401(k)s and 18% are investing less outside their 401(k)s, Schwab says.
“Workers are facing an array of economic challenges that are driving their demand for financial advice. Employers can help by debunking misconceptions about financial advice available through the workplace,” Catherine Golladay, head of Schwab Workplace Financial Services, said in a statement.
“Many employers offer different levels of advice at no additional cost or low cost, and workers tell us making 401(k) investment decisions with the help of a financial professional would make them more confident, which is one of the most important factors in their financial well-being," she added.
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