When it comes to retirement savings, there’s good news and bad news. The bad news is that workers are saving less in the midst of challenging economic conditions. The good news is that consultants have the opportunity to help change that.
This is according to a new study By
At Work, a division of Morgan Stanley’s wealth management arm that provides workplace financial solutions.
The second annual “State of the Workplace Financial Benefits Study” found that a majority of respondents — 62% — say they have reduced short- and long-term savings amid adverse inflationary conditions and/or recession concerns. Within that, nearly a third of respondents — 31% — said they had reduced contributions to their 401(k) plans. Twenty-six percent said they had slowed down paying off loans and loans, and 25% said they had contributed less to their long-term savings.
Notably, total U.S. retirement assets fell 10.2% to $33.7 trillion in the second quarter compared to the first quarter, according to the Investment Company Institute, a fund industry trade group. These assets accounted for 31% of all domestic financial assets in the US at the end of June, ICI said in a press release last month.
Retirement wealth has declined amid rocky financial markets and as inflation continues to push out of consumer pockets. The Labor Department’s August figures show that the CPI remained close to a four-decade high. September figures are due next week.
need advice. Despite the reduction in savings, many employees are eager to work with a financial advisor. When asked which type of retirement plan would be most beneficial, employees ranked access to a financial advisor as their number one choice, with 52% expressing this desire.
“Financial advisors are an often overlooked resource that can help employees achieve their long- and short-term financial and retirement goals,” says Anthony Bunnell, head of retirement at Morgan Stanley at Work.
This is an important takeaway for companies that offer retirement benefits. “And in the midst of today’s turbulent environment, while it is important to offer a competitive 401(k) or retirement plan, it is more important than ever to support it with access to financial guidance to support employees, no matter where they are. also face the financial situation,” Bannell says.
Financial advisors have many opportunities to help retirement savers, including encouraging them to take advantage of their financial wellness benefits which can include budgeting and savings tools. They can also review the investments available through the 401(k) and ensure an appropriate allocation, Bannell says. Financial advisors can “provide targeted financial education and resources to employees who meet them where they are in their financial journey,” he says.
In July, 1,000 working adults and 600 human resource leaders were surveyed in the US.
Credit: www.barrons.com /