More than half of the respondents in an Empower survey plan to put more money into retirement savings as inflation and recession fears strike workers.
Inflation concerns are forcing workers to reassess their retirement planning, new data show.
Many retirement savers also fear the financial repercussions of a recession, an Empower Retirement research brief, “Navigating change for a better tomorrow,” says.
“Although the United States was not in a recession when the study was conducted, 73% reported feeling anxious about how they would cope financially should one occur,” the brief, which draws on Empower’s Wealth and Wellness Index Mid-Year Survey, states. “Six in 10 (60%) said they would ride out a recessionary storm by delaying a major purchase [while] others said they would look for ways to make additional income. In addition, 58% said they would put more money into short-term savings and 56% would put more effort into paying down debt.”
Empower research shows that inflation and recession concerns are directly affecting employees, as 52% of survey respondents said they will put more money into retirement savings and 40% plan to save less for retirement.
Among the save-more cohort, 25% have initiated additional savings, 27% plan to do in the next six months and 48% have not done it and don’t plan to do so, the research shows. For the saving-less demographic, 21% have done so, 19% plan to in the next six months and 60% do not plan to make a change, according to Empower.
Among actions that individuals have taken to prepare for a potential recession, the most common was delaying a major purchase, at 38%. Seeking alternate income streams is second (32%), followed by paying off debt more aggressively (31%) and putting more money into short-term savings (31%).
“Our new research reveals sobering details about how inflation is impacting Americans’ financial attitudes and behaviors: 85% say they are worried about inflation, 69% say their income is not keeping pace and 56% believe their standard of living is declining,” the brief states.
Employers can help participants with inflation and recession concerns by ensuring that employees are aware of and taking advantage of the benefits for which they are eligible.
“Those benefits could include, among others, Employee Assistance Programs to help employees cope with stress and other emotional challenges or commuter program benefits to help offset the cost of returning to the office,” according to Empower. “Financial wellness programs and competitive retirement plans are also important differentiators for retaining or attracting talent. Staying attuned to what your employees are going through is what’s most important—and ultimately allows you to adapt to their changing needs.”
The survey was conducted by The Harris Poll on behalf of Empower and Personal Capital from April 19 to April 23 of this year. It queried 2,000 U.S. citizens age 18 and older.
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