Released in April 2021, the 31st Annual Retirement Confidence Survey (RCS) provides a wealth of information on how workers and retirees in the United States intend to achieve a financially secure retirement—data that has piqued the interest of many professionals as the COVID-19 pandemic continues to shape lives both personally and professionally.
As the longest-running survey of its kind, the RCS offers valuable in-depth information on retirement confidence among a variety of American populations, with 2021 bringing in even more data on Black and Hispanic workers and retirees. A recently released special report details more insights from the oversampling of these two groups led by the study’s co-authors, Greenwald Research and the Employee Benefit Research Institute (EBRI).
Fielded in both English and Spanish, this year’s Retirement Confidence Survey sought to determine key retirement trends from its audience of more than 3,000 respondents aged twenty-five and older. The annual study introduced many new questions to address the impact of COVID-19 and understand how the financial system influences retirement preparations for Black and Hispanic Americans specifically.
Greenwald and EBRI analyzed more than 730 completed surveys each from Black and Hispanic participants who shared their visions of retirement by answering questions about retirement plans and preferences in terms of age, timeline, expenses, quality of life, work, and other important factors.
Core Topics Covered in the 2021 RCS
- Personal perspectives on ability to achieve secure retirement
- Overall impact and burden of lower asset, income, and debt levels
- Trust in financial service institutions and reliance on other sources
- Effect of COVID-19 on retirement savings and other financial plans
- Interaction between supporting family and saving for retirement
Key Findings: Wealth, Work & More
The weight of debt can hinder the ability of many people to save, build wealth, and feel secure during retirement. In general, strong evidence correlates financial resources and retirement confidence in the United States. The Retirement Confidence Survey regularly finds this to be true, which is why Greenwald and EBRI researchers take into account demographic differences that exist in and among population segments when drawing conclusions about study results.
Much-needed context is added to respondents’ experiences when we recognize, for example, that Black and Hispanic Americans are more likely to have lower incomes and assets than White Americans or that they are more likely to be negatively impacted by the pandemic. This type of knowledge is essential to interpret data with greater accuracy and inform decision-makers who may possess the power to create change in areas related to retirement outcomes.
High levels of retirement confidence across the income spectrum in the RCS reflect the optimism of Black and Hispanic Americans. And although findings uncovered their unique financial priorities, they still underscore large income disparities and wealth gaps.
Retirement Confidence & Income
- Feeling confident in having the money to live a comfortable retirement increases with income. This is true regardless of race or ethnicity. In the survey’s upper-income group, 86 percent of White Americans, 84 percent of Black Americans, and 85 percent of Hispanic Americans reported confidence in their retirement prospects.
- Wealth gaps continue to exist between White and Black Americans and White and Hispanic Americans. For the middle- and upper-income groups of population segments, the highest amount of assets ($250,000 or more) was much higher for White Americans than for Black or Hispanic Americans.
Retirement Confidence & Work
- Negative income and job changes from the pandemic may affect retirement prospects. Hispanic Americans and Black Americans experienced more negative income and job changes than White Americans. Three in ten Hispanic workers compared to 2 in 10 White workers said COVID-19 influenced the number of hours they could work.
- Negative reasons are cited for retiring early and working for pay during retirement. Black and Hispanic retirees are more likely to retire earlier than planned for negative reasons, such as health concerns or disabilities, rather than for positive reasons like being able to afford earlier retirement. Those who work for income in retirement are also more likely to cite negative reasons like making ends meet or supporting others.
Retirement Confidence & Relationships
- Immediate support for friends and family often takes priority over retirement savings. In the upper-income group, nearly half of Black Americans and nearly one-half of Hispanic Americans believe it’s more important to help loved ones now than save for retirement, compared to one-third of White Americans.
- Personalized education and meaningful connections with financial advisors are important. Hispanic and Black Americans are more likely to prefer connections or commonalities between themselves and professional advisors, which can include gender, life experience, racial and ethnic background, or even ties to employers.
Remedying Retirement Confidence
With Black and Hispanic Americans reporting disproportionately lower financial resources and corresponding sentiments about their retirement and financial security, the Retirement Confidence Survey highlights many of the issues that continue to exist in the US financial system and some of the opportunities available to address them.
In addition to creating jobs with higher wages and salaries to make room for retirement savings, American employers can help by developing workplace savings plans that offer personalized financial advice or general assistance in balancing everyday financial priorities. Service companies in the finance sector can contribute by building a more diverse workforce to better serve all customers.
See a summary report of the 2021 Retirement Confidence Survey for an overview of all key findings, and learn more about purchasing the full results for deeper insights. To obtain early access to new research on retirement confidence and other health and wealth topics, get in touch with Greenwald.
Four Insights for Higher Education Retirement Plan Success
Four Insights for Higher Education Retirement Plan Success By Mathew Greenwald (Guest Blog for Voya)..
New Research Reveals Job-Seekers in Search of Higher Pay, Work-Life Balance, and Emerging Benefits Amid the Great Resignation
Greenwald’s The Role of Work-Life Balance & Benefits in The Great Resignation Survey results are here. The newly released research, powered by response:AI, shares insights into the role that traditional benefits play in job seekers’ decisions and the weight that aspects like mental health, remote work, and work-life balance have on their choices.