As of July, 38% full-time workers with 401(k) plans believe they will not be able to reach their retirement goals, according to a Bank of America survey released Tuesday morning.
Just 56% of employees surveyed were confident that they would be able to reach their retirement goals, down from 69% who felt confident in February 2022, according to Bank of America. This lack of confidence extended to other aspects of retirement, with only 38% of employees saying they understood what to expect from their Social Security benefits, 48% worried that if inflation continued at its current pace they would struggle to make ends meet and fewer than one in three believing they will be able to meet their spending needs in retirement. (RELATED: Americans Are Still Getting Poorer Under Biden, Data Shows)
“Offering comprehensive benefits and wellness programs can be critical for employers looking to reduce attrition, can empower employees to take control of their personal finances, and improve employee satisfaction,” said Bank of America’s Lorna Sabbia, head of retirement and personal wealth solutions.
A week ago tonight 60 Minutes aired @ScottPelley telling Biden that Americans are “shocked” by their grocery bills.
Biden replied:“First of all, let’s put this in perspective. Inflation rate month-to-month was up just an inch, hardly at all.”pic.twitter.com/IZy4TROyAU
— Cameron Cawthorne (@Cam_Cawthorne) September 25, 2022
Outside of retirement concerns, employees’ financial optimism has plummeted to a 5-year low, with just 44% saying they felt “financially well” as of July 2022, down 13% from February 2022, according to the poll. This is also significantly lower than pre-pandemic levels, with financial wellness in 2019 at 55%.
Inflation was also contributing to financial strain, with 71% of respondents reporting that the cost of living was outpacing salary or wages, according to Bank of America. Real average hourly earnings fell 2.8% year-on-year in August, according to the Bureau of Labor Statistics (BLS), as inflation stayed historically high at 8.3%, according to the BLS Consumer Price Index (CPI) .
Wall Street anticipates that the battle with inflation will continue through the end of the year, damaging investor expectations, with stocks briefly slipping into a bear market on Friday. Stocks closed in a bear market on Monday, according to Reuters, and despite a brief rebound Tuesday morning were poised to post a 5th straight day of losses at time of writing, according to The Wall Street Journal.
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