Workers in the United States believe they will need to save around $1.8 million for retirement, as inflation continues to fuel anxieties over savings, according to a survey from Charles Schwab.
This estimate is up from last year\u2019s $1.7 million, with 37 percent of respondents stating they think it\u2019s very likely they will reach this number, down 10 percentage points from last year, according to the survey.
The survey of 401(k) participants found 62 percent of workers think of inflation as a challenge to saving for a \u201ccomfortable retirement,\u201d up from last year\u2019s 45 percent, while 42 percent said stock market volatility is an obstacle, compared to last year\u2019s 33 percent. Around 78 percent said both inflation and stock market volatility is influencing their spending and saving habits, while 36 percent said they plan to delay retirement in light of these conditions.
Having a 401(k) plan is becoming a requirement for potential employees; 88 percent said it is a \u201cmust-have benefit,\u201d while 3 out of 4 respondents said they would turn down a new job if it didn\u2019t offer a 401(k) plan.
\u201cWhile many workers are trying to cut back on spending, some costs are unavoidable and certain areas of their finances have taken a hit,\u201d said Brian Bender, head of Schwab Workplace Financial Services. \u201cDespite these challenges, retirement saving continues to be a priority for workers, who have maintained their 401(k) savings rates and largely stayed on top of their 401(k) investments over the past year.\u201d
More workers are now stashing away retirement funds: 68 percent reported putting money into in a savings account, up from 61 percent last year; 47 percent reported IRA investments, compared to 33 percent last year; and 38 percent reported investing through a brokerage account, up from 29 percent.
The survey also touched upon the role of artificial intelligence (AI) in financial planning, and how 95 percent of workers are still more likely to take guidance from a human professional over computer-generated advice. That advice plays a large role in workers\u2019 decisions, with workers\u2019 confidence in financial decisions rising from 27 percent to 49 percent with help from a professional.
A majority of workers, 73 percent, said they would like personalized advice on their 401 (k) plan and 39 percent said they receive such advice through work plans.
The survey comes as inflation persists across the country.
Last week, Federal Reserve Chair Jerome Powell\u2002said there is still \u201ca long way to go\u201d to get inflation back to its 2 percent target. In July, the Fed raised its baseline interest rate to the highest level in 22 years in its fight to curb inflation.
The online study conducted by Logica Research questioned 1,000 401(k) participants in the U.S. between April 19-May 2. In addition to being 401(k) respondents, those surveyed worked for companies with at least 25 employees and were ages 21-70. The study said the data was self-reported by study participants and is not verified or validated.<\/p>\n\n\n\n