WHAT ARE THEY SAVING FOR?
Employees cite a series of wants and needs for their savings goals. Somewhat unsurprisingly, retirement is the most cited item, with unexpected emergencies, vacation/travel, major home expenditures and car expenses rounding out the top five.
of employees cite retirement as a savings goal.
Items Employees Are Saving For
There are clear differences in terms of which items employees rank highest in priority, with respondents generally prioritizing their needs over their wants.
Retirement (A need):
Among those who say they are saving for retirement, 58% of employees rated it as their top priority with another 22% citing it as 2nd priority.
Unexpected emergencies (A need):
45% of those who list this item rate it as their top priority with another 34% saying it is their 2nd priority.
Vacation/travel (A want):
While it is the third most cited savings item, only 17% of those who list it say this is their biggest priority. 29% cite it as 2nd most important priority.
Major home expenditures (A want or a need):
23% of employees who list this item call this it top priority and 26% say it is their 2nd priority.
Car (A want or a need):
Getting a car is top priority to 31% of those employees who cite it 1st and 2nd priority to an additional 27%.
When it comes to retirement, the older an employee is, the more likely they are to say they’re saving for retirement and the more likely they are to say it is their highest priority.
Those who say they are saving for retirement, sorted by age group
Retirement as 1st or 2nd Priority
How are employees saving to meet their goals?
Most employees leverage 401(k) plans and traditional savings accounts as their main vehicles for savings. Digging deeper, there are missed opportunities.
More than 1 in 4 employees say they keep cash/savings at home, where it earns no interest or appreciation and is at a higher risk of being stolen.
Just 1 in 5 employees say they’re using high-yield savings accounts which are offering almost 4% interest in the current market.
Savings vehicles (the percentage refers to total number of employees who said vehicle.)
A desire to save…for the most part.
Most employees express a clear desire to improve their savings behaviors.
When asked whether they’re more focused on saving for the future or living for the present
of employees say they’re more focused on saving vs spending.
Among these employees
are saving 8% or more.
As for the 35% of employees who say they’re more focused on spending, only
say they’re saving 8% or more.
Some of these employees express a general desire to live for the moment instead of the future.
Are You More Focused on Savings or Spending?
With that desire comes some hurdles to clear:
Needs and expenses
say they’re having a hard time saving for retirement because of other needs and expenses, such as day-to-day bills, credit card debt and mortgages.
say they spend more on non-essential items than they should, with this number relatively consistent across income levels, education, race and age.
Even with the hurdles, the desire to save remains strong:
of employees say if they could get a better handle on finances today, they’d be willing to save more for retirement.