Educational Resources Bolster Retirement Readiness

An IALC report suggests plan sponsors apply educational resourceslike seminars and informational fairsto heighten employee participation. 

A recent white paper from the Indexed Annuity Leadership Council (IALC) discusses the differences between blue-, white- and gray-collar workers in retirement readiness, and what employers can do to help narrow the gaps.

The study, “The State of America’s Workforce: The Reality of Retirement Readiness,” surveyed over 2,000 full-time U.S. workers ages 40 to 70 and found that, at a glance, about one-fifth lack the ability to retire, with blue- and gray-collar workers at the lower end of the spectrum. On average, 49.1% of white-collar workers indicated they are “somewhat ready” for retirement while 44.7% of blue- and gray-collar workers are “not very ready.”

The study finds 79% of respondents reported, to varying degrees, feeling worried about retirement, with 41% feeling very or somewhat worried—that number slightly higher for blue- and gray-collar workers. The remaining 21% of workers reported feeling no anxiety or unease over their forthcoming retirement years.

As to the influence of company size, companies with fewer than 50 employees are less likely to offer retirement planning options; larger companies are more likely to have workers who feel informed about retirement planning and excited about the years that lie ahead.

Pre-retirees with access to a workplace plan such as a 401(k) or pension are most likely to feel retirement ready, the study found. Fifty-nine percent of those feeling retirement-ready have access to a 401(k), while only 39% of workers who are not retirement ready do. Those prepared pre-retirees are five times as apt to own individual retirement accounts (IRAs), eight times as apt to have mutual funds and 10 times as apt to have purchased annuities.

To increase retirement readiness in industries where it is the lowest, the report recommends several strategies. Aside from implementing a 401(k) plan with automatic enrollment, plan sponsors for blue- and gray-collar work forces—e.g., those in the office or administrative support, food preparation and serving, transportation, and education, training and library trades—can implement seminars and informational fairs hosted by 401(k) plan providers, along with providing other educational resources.

Additionally, IALC says, workers will find it helpful to connect with an adviser, engage with online calculators and budgeting tools, and research their various retirement saving options.

More information from the study can be found here.