Linking retirement confidence and savings habits

People who are confident about retirement tend to have better savings habits than the average American.1

Retirement confidence remains low

With the Consumer Retirement Index at 26%, Americans are still exhibiting a low level of retirement confidence. Let’s explore the savings habits of Americans who are confident about retirement so we can help those who aren’t. 

Saving more each month

Confident individuals are nearly two times more likely than the average working-age U.S. adult to save more than 10% of their income each month—including saving inside and outside of their retirement plans.1  

How can we boost confidence by helping employees save more? Financial wellness or goal-setting tools, such as Lincoln WellnessPATH® , may allow employees to set savings goals and work up to them. Plan auto features can make it easier to save more by gradually increasing savings. Any time employees get raises or bonuses is a great time to encourage additional savings. 

Saving monetary gifts

Americans who are confident about retirement are nearly two times more likely than the average working-age U.S. adult to say they’re very careful about spending money. 

Saving unexpected money, such as gifts, tax returns, or bonuses, may help people progress toward financial goals, so setting specific goals can be a great motivator for employees to save more. Spending and savings habits may improve if employees have a general awareness of how they’re using their money each month. Budgeting tools and worksheets may help them make informed decisions about spending extra money. 

Employees may be surprised to see how even a small savings of a few dollars a day can add up to a large savings over time, as this small changes calculator shows.

Saving for an emergency

Among those who have an emergency fund, 35% are confident about retirement, compared to 26% among all working-age adults in the U.S.3

Encourage employees to use financial wellness or budgeting tools to find extra money to save in an emergency fund. You can emphasize that being prepared for financial emergencies may relieve stress and, in time, boost confidence. 

Encourage good savings habits

Some people are more savings-oriented and prefer to plan for the long run. For those who aren’t, saving can become a learned behavior. Promote good savings habits and the use of helpful tools and resources to help boost retirement confidence.
 

1 CivicScience, data collected June 1, 2019, through September 30, 2019.
2 Ibid.
3 Ibid.