Americans have many sources of financial stress, according to a new survey conducted by Charles Schwab. For example, debt reduction, monthly expenses, job security, and medical bills were among respondents’ most commonly cited money-related stressors. However, the top source of financial stress reported by surveyed adults was saving enough for a comfortable retirement. That is not too surprising since nearly two-thirds of respondents said that they wish they had spent less on dining out, expensive clothes, vacations, and other luxuries in the past and instead put that money in their 401(k) plan.
Those foregone contributions definitely represent a missed opportunity considering that 62 percent of respondents said this tax-advantaged savings vehicle will be their largest source of retirement income. Moreover, when asked about the obstacles that prevent participants from contributing as much as they would like to their 401(k), the top response behind large, unexpected expenses was an unwillingness to sacrifice their current standard of living (discretionary spending that enhances their quality of life). On the bright side, such responses show that surveyed adults at least recognize their past mistakes, and many appear to already be taking the right steps to improve their readiness for retirement. Sixty-five percent of respondents, for instance, said that they have increased the size of their regular 401(k) contributions within the past two years.
More than half of surveyed participants also acknowledged that their investments would likely perform better if they received guidance from a financial professional, and 77 percent even said that they would feel “extremely or very confident” in their ability to make the right 401(k) investment decisions if they were consulting with in an advisor. Many respondents would like such assistance with investing and general retirement planning to be available through the workplace. Providing those services could be a great way for employers to standout when competing for talent since 88 percent of surveyed adults already consider a 401(k) plan as a “must-have” benefit, and 90 percent even said that they would “think twice before accepting a job that didn't offer one.”
Sources: Charles Schwab
Post author: Charles Couch