Overall, I have been feeling optimistic after seeing recent employment numbers and signs that more people are looking for work, especially women, who were hardest hit by the economic fallout this past year. March 2021 job growth exceeded widespread expectations. The number of people looking for a job has also rebounded, and this increase is being driven primarily by women.
It has been over a year since the onset of the COVID-19 pandemic and there is still a long road ahead—not just for many people to get back to work, but also to get their overall, long-term finances back on track. In fact, 2020 underscored the importance of our jobs not only as the source of a paycheck for meeting day-to-day needs, but also as the foundation of longer-term financial security as it relates to healthcare and retirement.
In our own research from last year,* we found health insurance and 401(k) plans are considered “must-have” benefits by four in five people when looking for a new job. In fact, these two benefits are considered significantly more important than other benefits such as life insurance (45% rated it a “must-have”), disability insurance (43%), or the ability to work from home (35%).
As we hopefully continue to see the signs of recovery and an improving employment picture, we should also expect to see more people analyzing their personal finances in the context of both their earnings and workplace benefits.
While most workers see having a 401(k) as paramount when considering a job opportunity, that can often be the end of their active engagement with their retirement finances. Don’t stop there.
Whether you are starting a new job, or just recalibrating your financial situation in your current job, consider getting some advice to help you make a long-term plan. The study finds participants’ confidence in making investment decisions in their 401(k) increases significantly with the help of a financial professional. Almost half (49%) report they would be very confident in their investment decisions with help versus only a third (32%) feeling very confident on their own.
We have seen significant increases in engagement over the past year, so employers take note if you offer a 401(k) plan. Whether folks have $1,000 or $100,000, participants feel more confident when receiving financial advice. In the face of sustained market volatility and overall uncertainty due to COVID-19, it is more valuable than ever for companies to put financial planning resources for people front-and-center.
For companies and individuals alike, there have been many hard-learned lessons over the last twelve-plus months about navigating the present moment while being prepared for the future. This is especially true when it comes to health and finances. When employers and employees are in lockstep on retirement saving and financial security, it is a benefit for everyone.
The information contained herein is proprietary to Schwab Retirement Plan Services Inc. (SRPS) and is for informational purposes only. None of the information constitutes a recommendation by SRPS. The information is not intended to provide tax, legal, or investment advice; please consult with your accountant or investment adviser for how this applies to your specific situation. SRPS does not guarantee the suitability or potential value of any particular investment or information source. Certain information provided herein may be subject to change. None of the information contained herein may be copied, assigned, transferred, disclosed, or utilized without the express written approval of SRPS and its affiliates.
Workplace Financial Services is a business enterprise which offers products and services through Schwab Retirement Plan Services, Inc.; Schwab Stock Plan Services; and Compliance Solutions. Schwab Retirement Plan Services, Inc., provides recordkeeping and related services with respect to retirement plans. Schwab Stock Plan Services is a division of Charles Schwab & Co., Inc. providing equity compensation plan services and brokerage solutions for corporate clients. Compliance Solutions is comprised of Schwab Designated Brokerage Services (DBS), a division of Charles Schwab & Co., Inc., and Schwab Compliance Technologies, Inc. (SchwabCT). DBS provides brokerage solutions for corporate clients who monitor their employees’ securities activity. SchwabCT provides technology solutions for corporate clients to help facilitate their compliance technology program implementation. Schwab Retirement Plan Services, Inc., Schwab Compliance Technologies, Inc., and Charles Schwab & Co., Inc. (Member SIPC, www.sipc.org) are separate but affiliated entities, and each is a subsidiary of The Charles Schwab Corporation.
*2020 401(k) Participant Survey, Schwab Retirement Plan Services, Inc. September 2020.
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A version of this article was originally published on LinkedIn.
Photo Credit: Ben Rosenzweig