Only half of hourly employees feel they will be able to retire comfortably.
A survey of 2,000 employees split evenly between salaried and hourly workers revealed that hourly workers are less confident they will retire comfortably compared to salaried workers (53% vs. 63%).
Among hourly workers, one in three (33%) admitted they were “winging it” when it comes to their retirement plan.
Conducted by OnePoll on behalf of retirement benefits provider Human Interest, the survey found that a quarter of employees say their employer does not offer a retirement savings plan at all. Hourly workers making less than $60,000 a year had even less access than salaried workers making the same amount (28% with no access for hourly workers vs. 21% for salaried workers).
That lack of access may impact workers’ financial independence during retirement years — 54% of hourly workers say they will be somewhat or very reliant financially on a family member. Compared to salaried workers, hourly workers are twice as likely to say they do not have any other family member they can rely on.
The average worker is only saving 70% of what they plan to withdraw annually every year in retirement. While the average employee currently has $128,815 saved for retirement, they anticipate needing to withdraw $184,850 annually upon retiring.
In addition to these challenges, many hourly workers are the first in their families to have access to retirement savings. Nearly a third (32%) of hourly workers said their parents and grandparents did not have access to retirement savings plans, compared to 24% of salaried employees.
Some workers are delaying or omitting certain purchases in favor of funding their retirement, including home improvements/repairs (48%), a vacation (45%), and even a wedding (39%).
Even considering all these retirement savings access challenges, a strong majority (73%) of workers are likely to embrace “pretirement,” an emerging life stage between full-time work and retirement in which hours are reduced and people consider new job roles.
Of those planning to “pretire,” 39% expect to pivot to a new job in a different industry.
“Both hourly and salaried workers seek flexibility and choices in retirement planning, but we’ve seen that hourly workers overwhelmingly lack access to plans in the first place,” said Kristina Wallender, Chief Experience Officer at Human Interest.
Men were much more confident they could comfortably retire compared to women (66% vs. 51%), an indication of pay equity gaps and fewer savings opportunities for women.
More men are likely to pretire than women (79% vs. 67%). This may be a result of the gender savings gap — 52% of women have currently saved less than $100,000 for retirement, compared to 45% of men.
“Our survey found that four out of every 10 people find it hard to talk about saving for retirement with anyone other than a spouse,” said Wallender. “We need to bring the conversation about saving for retirement out in the open so that talking about it becomes a social norm.”
PURCHASES PEOPLE ARE DELAYING IN FAVOR OF THEIR RETIREMENT FUND:
- Home improvements/repairs – 48%
- A vacation – 45%
- A wedding – 39%
- Continued education – 37%
- Traveling – 36%
- A vehicle – 35%
- Real estate – 31%
Produced in association with SWNS Research
(Additional reporting provided by Talker Research)
