Survey Reveals Employed American Concerns About Achieving Retirement Goals

The average American says the 5-year plan is dead; Millennials want more info from their employer.

A survey of 2,000 employed Americans found that when thinking about saving for the future, a five-year plan simply isn’t going to cut it.

Forty-two years ago, a rule change by the Internal Revenue Service set the stage for the 401(k)-retirement savings plan, a change that contributed to the majority of working-age individuals leveraging tax-deferred salary deductions.

Those tax-deferred deductions are more important than ever according to new research commissioned by SurePayroll.

A survey of 2,000 employed Americans found that when thinking about saving for the future, the average American plans for retirement a minimum of seven years earlier than years past.

The Five-Year Plan Is Dead

Nearly three-quarters of respondents say the five-year plan is less achievable today than ever before, with the average American now planning for their financial future 12 years ahead. 

A quarter of employed Americans admit that despite their efforts, they’re not close to achieving their retirement goals today. The majority (59%) of respondents —especially millennials (22%)—wish they started saving sooner. And, one in eight don’t currently feel prepared for retirement.

Interestingly, Gen Zers (53%) are just as worried as baby boomers (54%) about whether they’ll receive Social Security benefits, one factor that makes the traditional five-year plan less achievable to them. To get a head start on saving money for the future, 57% of Gen Zers are already saving for retirement.

Small Businesses Lead the Way

While most respondents whose employer offers a 401(k) are enrolled in it (71%), one in five aren’t (19%). Employed Americans who work at a small business are more likely to enroll in their employer's 401(k) plan (82%) than those who work at a private company (72%) or public company (61%).

“Employers helping employees achieve their financial goals is good for small business growth, good for employee retention and good for the community,” said Gabriela Rodriguez, 401(k) product marketing manager, SurePayroll. “Offering employees a retirement plan also helps relieve stress for their future, which is especially important for younger generations.”

SECURE Act 2.0 Changes 401(k) Plan Landscape for Small Businesses

Half of the respondents who have not started saving for retirement yet said they’re waiting for their employer to offer or explain more about a retirement plan (50%) and 43% said they haven’t had the time to start.

Millennials’ top reasons for not saving for the future yet are also waiting for their employer to offer more information (60%) and not knowing where to start (40%).

Those whose employer does offer a 401(k) plan but don’t participate in it said they just need all their income for other expenses now (61%) and that their employer simply doesn’t contribute enough to make this option feel worthwhile (43%).

Onboarding is the most popular time to sign up (42%) and the majority (57%) of Americans who are enrolled in a 401(k) plan based their decision on employer-provided materials.

"Employers play an important role educating employees on the value of their retirement benefits,” Rodriguez said. “They should emphasize the value of their 401(k) plan—each dollar contributed during your 20s can grow to $17 by the time you retire—and promote sign up instructions during onboarding and throughout the year.”

Offering Retirement Plan Drives Retention

Those who do participate in the plan said that their employer’s contribution adds value (57%), doubles the value when they do match (56%) and has helpful tax benefits (49%). Respondents who work at small businesses are especially partial to a 401(k) with an employer match (50%) as opposed to one without a match (35%) when it comes to staying at a job.

Whether or not they use them, benefits like retirement planning matter in how people think about their employer.

After health care (49%), a 401(k) plan with a match (47%) was the top non-cash benefits that would impact their choice of whether to stay with their employer.

This was followed by a 401(k) without a match (32%) and mental health benefits (29%).

Needs or Wants? Americans Re-evaluating

Employed adults are being proactive outside of the workplace, too; 57% have a separate retirement fund from what their employer offers, including a majority of those who utilize that offer (74%).

The survey also found that when thinking about their financial future, 55% of Americans said they need to reconsider what qualifies as a “necessity” to put more money toward retirement. And to help reach their goals, nearly two in five would take a second job to help put money towards their future (39%). Others would prioritize necessary purchases and cut down on impulse spending (48%) while another 46% would work extra hours at their job.

Respondents cite rising household expenses (59%), inflation (49%) and school debt (43%) as the reasons they believe the five-year plan is less achievable than ever before.

Money is top of mind for many who have big plans for the future like putting their kids through college (45%), paying off school debt (42%) and buying their dream vehicle (41%).

Forty percent also have dreams to travel and 33% want to retire with comfort.

Survey methodology:

This random double-opt-in survey of 2,000 employed Americans was commissioned by Sure between August 8 and August 9, 2023. It was conducted by market research company OnePoll, whose team members are members of the Market Research Society and have corporate membership to the American Association for Public Opinion Research (AAPOR) and the European Society for Opinion and Marketing Research (ESOMAR).