Need to Know: Retirement Confidence on the Rise


The pandemic has changed so much about the way we live and work, and new research from Schwab indicates that it's also affecting how people feel about retirement and what they want from their financial planning team.


Optimism on the Rise

According to Schwab’s annual nationwide survey of 401(k) plan participants, more than half of the 1,000 people surveyed (53%) say they are “very likely” to achieve their retirement goals, compared with only 37% who said the same in 2020.


On average, plan participants in 2021 believe they need to save $1.9 million for retirement, which is the same amount as in 2020. Nearly all (91%) say their financial health is either very good or pretty good.


Schwab found that the pandemic changed the way people approached their finances:

  • 48% plan to save more in general;

  • 36% plan to increase their 401(k) contribution rate;

  • 35% plan to invest more outside of their 401(k) plan; and

  • 34% plan to pay off debt.

If people do adopt these habits as they predict, this has the potential to increase retirement optimism even more, as a boost in savings or retirement contribution, as well as a diverse portfolio and


Help Wanted

Retirement optimism is always welcome news, but it's important to note that many people Despite the optimism, workers still face savings obstacles, with 23% thinking they will retire later than planned, despite doing well financially. The top concerns that might get in the way of saving for retirement include market volatility (32%), unexpected expenses (29%) and monthly expenses (27%). Consequently, 6 in 10 (61%) think their financial situation warrants professional advice to address these kinds of challenges, compared with half (50%) who said so in 2020.


Here's where most people want advice:

  • calculating a retirement savings goal (44%);

  • receiving advice on how to invest a 401(k) (39%);

  • figuring out how to create income in retirement (35%); and

  • anticipating taxes in retirement (35%).

The percentage of survey respondents who are very confident making their own 401(k) investment decisions has increased from 25% in 2019 to 40% in 2021. However, that still lags those who are very confident in making investment decisions with the help of a financial professional: 44% in 2019 and 56% in 2021.

‘Must-Have’ Benefits

Predictably, 401(k) plans (86%) and health insurance (84%) are at the top of the list of desired workplace benefits, with more than 8 in 10 participants saying these are “must-haves.” Other top-five must-have benefits, according to survey respondents, are life insurance (50%), disability insurance (43%), and health savings accounts (38%).


Notably, HSAs had the largest increase in respondents who consider them must-haves compared with 2020, growing from 32% to 38%. More participants also say they are using HSAs to save for health care expenses in retirement—registering at 54% in 2021, compared with 41% in 2020.


Key Takeaways

We're likely a few years away from truly understanding the impact of the pandemic on how we save for our daily lives and retirement, but early trends indicate we may be experiencing a shift in how we approach our financial lives.


Now, more than ever, you need a strong team on your side to help you navigate what comes next for you, your family, and your business. Contact the Robin S. Weingast & Associates team and find out how we can help.

4 views0 comments

Recent Posts

See All