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Survey Report

Retirement expectations

2020 Global Benefits Attitudes Survey – U.S.

Health and Benefits|Retirement|Talent|Total Rewards|Wellbeing
N/A

February 5, 2021

Discover employee perspectives on their work experience during COVID-19 and their wellbeing, retirement expectations and benefit preferences.
  • The majority of employees (74%) maintained their retirement savings contributions, while 13% increased their contributions. But where employers reduced or stopped contributions to defined contribution plans, 44% of employees also reduced their contributions.
  • While 54% of employees say they are heading in the right direction in terms of their retirement savings, half of those living paycheck to paycheck and 55% of those who have been furloughed expect to work longer as a result of the pandemic.
  • One in four employees took a 401(k) loan or withdrawal, or accessed other retirement savings. Those in financial distress (furloughed employees and those living paycheck to paycheck) and younger employees are more likely to have accessed their retirement savings, but most are confident of repaying in the next five years. Notably, struggling employees are more confident that they will repay the withdrawn amounts than younger workers (68% vs. 48%).
Icon 19 - How are employees responding?
How are employees responding?
  • One in four employees (25%) expects to retire later than planned, with three in 10 employees (31%) planning to retire at age 70 or older, roughly the same percentage as in 2019. Almost a third (31%) say that they will need to save more for retirement. Close to half (47%) of employees age 50 or older who are in a worse financial situation as a result of the pandemic expect a lower retirement income.
  • Half of workers over age 50 plan to make a gradual exit from the workforce into retirement, many because they need to keep working, especially those in poorest health or dealing with mental health issues; however, many employees also want to phase into retirement because they still enjoy the work they are doing.
Icon 16 - How can employers make a positive impact?
How can employers make a positive impact?
  • Saving for retirement remains the number one area where employees want help from their employers. As more sponsors offer primarily defined contribution plans, it remains important to engage employees in starting and maintaining their retirement saving paths.
  • It’s essential for employers to be cognizant of employees whose financial positions may have changed as a result of the pandemic and, in particular, employees who may have tapped into retirement savings or paused retirement plan contributions to meet their short-term financial needs. It may take time for these employees to get back on their prior retirement savings track.
  • Our findings show that employees with financial challenges would like greater flexibility to use retirement savings if needed, indicating that employers may be able to further support employees through the use of design features such as emergency savings options.

Next section: Getting the most from their benefits

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