Inflation Impact on Retirement Savings: Schwab 401(k) Participant Study

Yahoo!, InvestmentNews, and PlanSponsor recently covered Charles Schwab’s 401(k) Participant Study, conducted with Logica Research. This study looked at how rising costs and market volatility are affecting how and how much Americans’ are saving for retirement, particularly when it comes to 401(k) plans.

Workers are Changing 401(k) Participation

As cited in Yahoo! covering this Schwab 401(k) Participant Study, current market situations have caused 79% of American workers to change habits around spending and saving, and 44% have altered their 401(k) investments. As shown in InvestmentNews, 15% reported contributing less to their 401(k)s.

Looking to Employers for Help

Yahoo! shares that 26% of study participants report financial stress impacting their ability to do their job. In turn, the “majority of employers (60%) took action to help workers manage financial stress in the form of increased pay (32%), increased 401(k) match (23%), and additional bonus (20%). Some also decreased hours to allow for better work-life balance (11%).”

The Impact of Inflation

In PlanSponsor’s study coverage, they call out that rising inflation is workers’ top hurdle to saving for retirement. Workers are struggling more than last year, and a third of 401(k) plan participants don’t know how long their savings will last in retirement. According to Schwab’s 401(k) Participant Study, inflation is impacting workers’ wallets and many have had to reduce spending as well as their savings. To find out more information, you can read articles by Yahoo!, InvestmentNews, and PlanSponsor.

Background: Logica Research conducted an online survey of U.S. 401(k) participants for Schwab Retirement Plan Services from April 4 and April 19, 2022. Online survey respondents were actively employed by companies with at least 25 employees, were 401(k) plan participants and were 21-70 years old. You can find more information on the 401(k) Participant Study here.

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