It’s a fact: one-third of working Americans don’t have any retirement savings and it’s not because of a lack of savings opportunities. Sixty eight of working-age people (25-64) did not participate in an employer-sponsored 401(k) plan, according to recent Forbes data.
That means roughly 100 million Americans are leaving free money on the table.
No matter how hard companies work, if they can’t drive adoption and conquer the participation hurdles that hinder retirement saving, employees, companies, and the U.S. economy could find themselves in long-term financial trouble big trouble.
To break the cycle of not saving, here are three savings hurdles today’s employers and employees must tackle.
1. THE STUDENT LOAN STRUGGLE
The sad truth about debt is that for many, it’s hard to see beyond it. Many student loan borrowers point their financial focus to biggest numbers they see. Many times, that big target is student loans.
National data shows that the average student loan borrower owes $37,173. At Student Loan Genius, our user data shows that that number is much higher for highly skilled talent, around $61,000.
Focus on these monthly student debt payments can keep many borrowers from even considering contributing to a 401(k) or other retirement plan.
HOW TO HELP
To conquer the student loan hurdle, companies need to get creative. One options for helping your top talent over the hurdle is Genius Save, a way to activate unused retirement plan dollars and make investing easy for those who have student loans.
2. SHORT SIGHTED GOALS
In addition to the “big numbers,” many employees focus on the short-term financial goals they can see and, literally, feel. These near-sighted life moments like starting a family, buying a home, or buying a car can overshadow thoughts (and the obvious financial truths) related to saving.
HOW TO HELP
To help combat these influential retirement distractors, it takes a combination of benefits and real education. Whether through a financial wellness program, like Mercer’s Financial Wellness Solution, or leveraging an annual survey to find your best benefits mix, retirement saving won’t become an employee priority until employers discover how to clear the way for their employees.
3. REAL-TIME FINANCIAL STRESS
THE BIG NUMBERS AND LIFE MILESTONES ARE ONLY HALF OF THE RETIREMENT-HURDLE STORY. THE OTHER HALF IS ABOUT THE MENTAL STRESS THAT COMES ALONG WITH MANAGING FINANCES.
- 63% of Americans don’t have $500 in emergency savings
- 75% of employees don’t feel financially secure
- 60% of employees suffer from financial stress
The data shows that a large percentage of individual are struggling with serious financial pressure and the ability to save to get ahead. Unfortunately, for many the pressure turns into avoidance and that avoidance shows up in low or empty savings and retirement accounts.
How to help
If you are looking to take the first step toward improving your the financial wellness of your employees, you need hard data. Complete the form below to talk with our team about a company study to gauge how student loan benefits and other perks can help your talent get ahead of the hurdles that block real financial progress.