According to a recent survey, Americans with employer-sponsored retirement plans are reorganizing how they save for retirement due to inflation.
Forty-five percent of 401(k) plan members now rate inflation as the biggest barrier to saving for retirement, Schwab says he found in a survey of 1,000 plan participants between the ages of 21 and 70 who were actively employed by companies with at least 25 employees and participated in their company’s 401(k) plan.
This is ahead of monthly expenses, seen by 35% of respondents as the main obstacle, as well as market volatility and unexpected expenses, cited by 33% in each case, according to the survey results.
Due to inflation and market volatility, 79% of respondents are changing the way they save and spend, says Schwab.
For example, 34% are cutting back on purchases, 32% are buying cheaper alternatives, and 21% are paying off debt more slowly than before, according to the survey results.
But 33% still save less and 30% still spend more, says Schwab.
At the same time, 20% of respondents save less for emergencies, according to the survey results.
Additionally, 44% have changed their 401(k) investments, while 15% are contributing less to their 401(k)s and 18% are investing less outside of their 401(k)s, Schwab says.
“Workers face a range of economic challenges that drive their demand for financial advice. Employers can help by debunking misconceptions about financial advice available in the workplace,” Catherine Golladayboss of Financial Services Schwab Workplacesaid in a statement.
“Many employers offer different levels of advice at no additional or low cost, and workers tell us that making 401(k) investment decisions with the help of a financial professional would make them feel more confident. which is one of the most important factors in their financial well-being,” she added.
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