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Goldman Sachs Asset Management Survey: 77% of Workers Most Desire Retirement Investing and Advice from their Employers

Employers 09.27.2024 6 MIN

This year’s Retirement Survey & Insights Report: Putting Planning into Retirement Plans1 from Goldman Sachs Asset Management provides unique insight for employers as they consider new and innovative solutions to support the wide range of financial needs facing employees today. The findings underscore the significant benefits planning and financial advice may have for retirement savers, and ultimately their likelihood of achieving retirement preparedness.

As inflation eases and economic conditions seem to be improving, for the first time since the onset of the COVID-19 pandemic in 2020 the effects of competing financial priorities on retirement savers has declined. Even still, the survey finds saving for retirement has become increasingly complex as individuals balance multiple financial priorities.

Key Takeaways2

  • Working respondents are more optimistic about their finances this year, with 48% reporting improvements. Only 23% report a decline since last year. Top financial changes over the last year include an increase in everyday expenses and credit card debt and less emergency savings.
  • Retirement investing and advice are the services employees (77% of all working respondents) most desire from their employers. When these services incorporate planning through an enhanced, broad-based experience, employees are able to think intentionally about their savings journey, assess their likelihood of reaching retirement preparedness and identify actions to potentially improve their retirement readiness.
  • The impact of the “Financial Vortex” — a complex web of competing priorities across personal and economic challenges — declined in 2024. Despite this improvement, over 60% of working respondents still believe they will need to delay their retirement as a result of competing priorities. However, there was a 3% increase in the number of respondents who don’t expect a delay — which is now at 39%.
  • Personalized planning and advice can potentially improve outcomes for workers and retirees, leading to increased confidence and retirement savings, and reduced stress managing savings, likelihood of delaying retirement, and stress when entering retirement. 80% of working respondents with a plan are more likely to have savings on track or ahead of schedule, compared to 39% without one.
  • Working respondents with a personalized retirement plan are more likely to not spend time at work dealing with personal financial issues (26% with a plan vs 39% without one).
  • Gen Z (61%) and Millennials (57%) are more likely to have personalized retirement plans, compared to Baby Boomers (53%) and Gen X (43%). Men (60% as compared to 46% of women) and those with higher asset levels are also more likely to have a personalized plan.
  • 62% of working respondents and 45% of retirees have accumulated less than $200,000 in retirement savings. In particular, 49% of working Baby Boomers and 64% of Gen Xers have less than $200,000 in savings.
  • 62% of respondents report having less than three months of emergency savings.
  • Only one in three working respondents say they have the time, interest and knowledge to manage their own savings.


Challenges managing retirement savings

No one intends to reach retirement unprepared. However, retirement savers today face a multitude of life events and financial challenges that can disrupt savings objectives. While “save more for retirement” is common advice, it may not always be the most appropriate next step. In some cases, it may reduce one’s financial security, potentially leading to financial hardships. It’s essential to recognize that while saving for retirement is important, it should be balanced with other financial priorities. For example, 35% of working respondents who are paying the minimum balance on their credit cards may need to decide whether to save or pay down those cards.
 

“A tailored plan helps individuals address both near- and long-term financial priorities by balancing the needs of their current life stage with more distant goals like retirement.” ~ Nancy DeRusso, head of Financial Planning, Financial Wellness and SurvivorSupport® at Goldman Sachs Ayco


Planning and advice can potentially improve outcomes

Retirees who either seek advice or rely on an advisor to manage their savings are more likely to have higher retirement savings. Over half of “do it yourself” respondents have less than $100,000 in savings, while over 50% of those with an advisor have more than $500,000. At the same time, almost half of working DIY and Passive (set and forget) respondents say they are behind schedule in their retirement savings.

Retired

Source: Goldman Sachs Asset Management. As of August 2024.



Workng respondents with a personalized plan tend to be significantly better positioned for retirement than those without, as they are:

  • more likely to have retirement savings on track or ahead of schedule (80% with a plan vs. 39% without one);
  • more confident in their ability to reach retirement goals (80% vs. 42%);
  • more likely to navigate competing priorities (43% vs. 35%); and
  • more likely to increase their savings year-over-year (62% vs. 39%).


The primary motivators for working with a financial advisor are to gain confidence and develop a well-informed strategy, though the perceived cost of working with a financial advisor continues to be a factor keeping people from seeking advice. 


Integrating planning into plan design

Over the past two decades, retirement plans have increasingly adopted default saving and investing features to encourage participation. Our analysis of the offerings at over 400 companies where Goldman Sachs Ayco provides financial counseling finds 80% of companies provide auto-enrollment and 61% provide auto-escalation features.3 While these default features may increase participation, the Retirement Survey & Insights Report notes they may not align with individual savings goals as they don’t always address how employees manage their savings or how they can optimize plan features.

For employers looking to enhance their current offerings, working respondents noted financial planning and advice, and employer contributions are the most valued services, surpassing all other focus areas. This preference reflects the significant challenges employees encounter in managing their savings. The top additional benefits employees want if their employer could contribute an additional $1,000 toward their available offerings include higher retirement contributions, emergency savings contributions and guaranteed retirement income.
 

Working

Source: Goldman Sachs Asset Management. As of August 2024.

 

Based on the report’s findings, employers may want to consider how retirement plans can create an environment where every employee — regardless of financial acumen, level of savings or engagement — has the opportunity to plan effectively. Coupling planning with targeted education and easy-to-use planning tools may serve as the crucial element that empowers employees to effectively utilize savings and investment features. These benefits ultimately may help employees make informed decisions regarding their financial future and lead to better retirement outcomes.

Read the 2024 Retirement Survey & Insights Report for a deeper dive into these findings.
 

 

If this update sparks any questions about your personal situation, contact your Goldman Sachs Ayco advisor

Interested in learning more about Goldman Sachs Ayco workplace financial planning? Contact us today.


1 Source: Goldman Sachs Asset Management’s Retirement Survey & Insights Report 2024; Refer to the report for full disclosures.

2 The survey was conducted by Goldman Sachs Asset Management and Qualtrics Experience Management between June 27, 2024–July 21, 2024. Findings are from 4,874 individuals surveyed in July 2024 and provide insights from a diverse set of perspectives, including (i) working individuals (3,280 working individuals across generations), and (ii) retired individuals (1,594 retired individuals age 45–75). Views expressed are those of survey respondents. This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

3 2024 data is based on 411 Goldman Sachs Ayco corporate partners as of May 2024.