For today’s workforce, financial confidence is critical.
Research shows that there are steps employers/plan sponsors can take to help employees feel more confident about their retirement outlook, especially when it comes to addressing savings gaps and improving financial wellness. Broadcast Retirement Network’s Jeffrey Snyder discusses these steps with Lincoln Financial’s Maggie Younis.
Jeffrey H. Snyder, Broadcast Retirement Network
This morning, wellness at work, what employees are saying about their workplace benefits. Joining me now to help break it all down, Maggie Yunus is the head of consultant relations with Lincoln Financial. Maggie, so great to see you.
Thanks for joining us on the program this morning.
Maggie Younis, Lincoln Financial
Thank you, Jeff. Great to see you.
Jeffrey H. Snyder, Broadcast Retirement Network
Yeah, it’s great to see you as well. And Lincoln always does so much research each and every year around so many different specialties. But today we’re talking about retirement and the wellness at work study.
First, can you give us a little bit of a background about the wellness at work study, how it works, who it covers, and then we can take it from there in terms of some of the key findings.
Maggie Younis, Lincoln Financial
Yeah, great. Thank you. So since 2012, Lincoln has been conducting proprietary research to hear directly from employees to learn more about their views and experiences.
We’ve continued this research because we generally want to understand how people feel about their workplace benefits, retirement savings, and overall financial wellness. By investing in our own study, we’re able to gather insights that help us better support our consultants, clients, and participants that we serve. This year’s survey included more than 2,500 full-time workers spanning different industries and generations who are eligible to contribute to an employer-sponsored plan.
And for today’s workforce, financial confidence is critical. The study revealed that fewer than half of full-time employees feel financially secure. With rising debt, cost of living pressures, and competing priorities, we believe there are opportunities for employers to consider to help with financial confidence and improving retirement readiness.
Jeffrey H. Snyder, Broadcast Retirement Network
Well, as a follow-up to that, Maggie, how are you defining retirement readiness? And why is retirement readiness such a critical issue at this time?
Maggie Younis, Lincoln Financial
Yeah, so we really defined retirement readiness as the ability for someone to retire when they want to, to maintain their lifestyle, and having that income to last throughout their lifetime. And that really, honestly, hasn’t changed over the last few years with that study. And unfortunately though, many employees still are not feeling confident about their ability to retire.
Only 28% of workers are highly confident about their retirement readiness, while 45% are afraid they’ll never be able to retire, which is pretty shocking. And while we’ve seen retirement contributions rebound to 2021 levels after a decrease in 2023, 61% of plan participants still believe they’re saving less than needed. And if you cut that data by industry, we also found that those in healthcare, education, and government still tend to save less.
But the good news is that research shows there are steps that plan sponsors can take to help employees feel more confident about their retirement outlook, especially when it comes to addressing savings gaps and improving financial wellness.
Jeffrey H. Snyder, Broadcast Retirement Network
So Maggie, when you look at the data, how, and you know, there are different segments of the marketplace. How did retirement readiness vary across healthcare, education, and the government markets? What stood out?
Maggie Younis, Lincoln Financial
Yeah. So across all industries, the survey respondents listed cost of living, unexpected expenses, and debt as the top barriers preventing them from saving more. For these three sectors in particular though, debt is the major obstacle.
Over 80% of workers across these three sectors are carrying debt, with more than half saying it’s difficult to pay off debt while also saving for retirement. And healthcare workers in particular carry more student loan debt than any other industry. So it’s no surprise that they report more problematic debt than most.
Jeffrey H. Snyder, Broadcast Retirement Network
So Maggie, let’s, let’s talk a little bit more about the data. Did it reveal any gaps or challenges that consultants or advisors in these three sectors should be paying closer attention to?
Maggie Younis, Lincoln Financial
Yes. I think these results provide great insights for consultants to consider. At the highest level, workers across industries want investment options that simplify decisions and ease concerns about outliving savings.
Healthcare, government, and education workers are no exception. The majority of workers in all three sectors expressed interest in managed accounts that personalize investment choices based on their goals, age, and income, and a need for ongoing professional support. Determining how much to save is the top priority for healthcare and education workers, while choosing investments that align with their goals had equal importance for government workers.
The respondents from these three sectors also identified student loan debt, management support, and emergency savings accounts as benefits they’d have interest in. To put it simply, employees across all industries want more than basic coverage. They’re looking for tools to reduce stress and improve their financial outlook.
Employers play a key role by not only offering wellness solutions, but also promoting them across their benefit solutions. Consultants play an important role as well in helping these employers consider the impact that additional tools and options provide.
Jeffrey H. Snyder, Broadcast Retirement Network
So as a follow-up to that, how do you personally approach consultants about improving retirement outcomes for their clients? And how will this new research impact things like plan design, managed accounts, guaranteed income, and retirement consultants?
Maggie Younis, Lincoln Financial
Jeff, the study reinforces what we have been hearing in the field, but it’s really not a one-size-fits-all approach as consultant firms have different philosophies and each client has different goals and needs. We focus on understanding what the client is looking to achieve and tailor a retirement program based on those needs in partnership with the consultant. We are talking more about automatic enrollment features and utilizing advisor-managed accounts or traditional managed accounts as the QDIA to help facilitate better participant outcomes.
But the most consistent conversation is around education and the desire for one-on-one interactions. We have seen an increase in engagement in the retirement plan, benefit adoption, and wellness tools when retirement education consultants are available. And consultants are looking for help.
They’re looking for partners who can also support education on multiple topics. Really gone are the days of talking about retirement in a vacuum. And this study shows so many factors are impacting retirement readiness and confidence.
Jeffrey H. Snyder, Broadcast Retirement Network
Yeah, I mean, it’s certainly a lot. I mean, you have to be thinking about caregiving, long-term care, financial planning, retirement planning. You mentioned earlier that employers can take steps to improve the retirement outcomes in their plans.
Could you expand a little bit more on what those strategies look like in actual practice?
Maggie Younis, Lincoln Financial
Yeah, so the study really shows that positive retirement saving habits can boost employee overall financial sense of security. Those who have put thought into envisioning what their retirement is going to look like And if they have a specific retirement savings goal, they are more likely to feel completely or mostly secure financially. The key takeaway here is that employers should be encouraging employees to envision retirement, set goals, and engage with resources, while offering a comprehensive benefit package that can help employees to improve their financial wellness so they can save more.
Employers can also offer investment solutions that provide that built-in support, such as guaranteed income that focus on turning savings into lasting retirement income, and managed accounts that offer that personalized investing aligned with those employee goals. Interest in guaranteed income is so high that both participants and non-participants shared that they would likely keep it if they were auto-enrolled into a product. And those who currently don’t have it envision that it would help them worry less about outliving their savings, and they stress less about how much they’re saving and can feel more confident about covering their basic living expenses in retirement.
Jeffrey H. Snyder, Broadcast Retirement Network
Well, you certainly don’t want to outlive your money, and that’s certainly a way to not outlive your money and to lower the stress, at least one stress of life. Let’s end with how you mentioned the survey respondents have an interest in managed accounts and also retirement consultants. The data seems to indicate that there’s a need for greater education support.
Is that an accurate assessment?
Maggie Younis, Lincoln Financial
Absolutely. Employees lack confidence when it comes to retirement plan decision-making. Only half are extremely or very confident about making decisions about their retirement plan, and only a third are very confident about determining how much to save.
Accordingly, they’re overwhelmingly interested in that personal education. For managed accounts, respondents indicated advice on how much to save and when to consider retiring, management by a professional money manager, and individualized recommendations as the most appealing aspects of the service. And in our survey, we use the term retirement consultant to represent personal help from a financial professional, someone who they can meet with one-on-one to help an individual enroll in the plan or make plan changes and answer those retirement savings questions and provide education around retirement planning.
A retirement consultant could be a financial advisor servicing the plan or someone working directly for the plan provider. For example, Lincoln employs retirement consultants who can offer support for participants and complement the services the advisor provides. The research results show that professional help can have a positive impact.
Those working with a retirement consultant feel dramatically more confident about their decisions with 80% extremely or very confident versus 50% who don’t use a retirement consultant.
Jeffrey H. Snyder, Broadcast Retirement Network
Well, Maggie, certainly a very comprehensive report, and look, we just hit the very top of the report. There’s so much more detail that people can certainly follow with you and other members of the Lincoln team. Thank you so much for joining us, and look, we look forward to having you back on the program again very soon.
Maggie Younis, Lincoln Financial
Thank you, Jeff. We appreciate the partnership.
Jeffrey H. Snyder, Broadcast Retirement Network
That’s all for this morning. Until tomorrow, I’m Jeff Snyder. Stay safe, keep on saving, and don’t forget, roll with the changes.
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