Without Their 401(k)s, Saving for Retirement Wouldn’t Be Possible for Many Americans

Did you know almost half of 401(k) owners say they wouldn’t save for retirement without their workplace plan? A recent survey on workplace retirement plans shows that 401(k)s are a crucial savings tool for millions of Americans, especially those with low incomes.

The survey found that Americans have overwhelmingly positive views of their plans. In fact, they see their retirement plans as much more than just savings vehicles.

Here’s what Americans really think about their plans:

• The steady paycheck-by-paycheck contributions mean savers are less worried about short-term ups and downs in the financial markets.
  401(k) contributions from each paycheck help workers stay invested through market downturns, so they benefit from long-term growth and compounding. These steady contributions give 401(k) owners confidence and reassurance about the nest egg they’re building for retirement.
• Workplace retirement plans provide important financial education.
  Most 401(k) account owners say their plans offer useful educational materials about saving and investing. These materials introduce millions of Americans to key concepts necessary to make important financial decisions and save for big, long-term goals. In fact, for many Americans, their 401(k) plan is their first investment account.
• Workplace retirement plans help savers focus on the long term and plan for the future.
  Americans say that having a workplace retirement plan helps them focus on the future rather than their immediate needs. Their plans help them to be proactive and forward thinking about their financial futures. Americans also say they appreciate the choice and control they have over their retirement plan investments, and they value the freedom to make their own decisions about how to manage their own retirement assets and income.

It’s time to commit to defending the US retirement system because Americans value the flexibility of their retirement plans, as well as the wide variety of choices and investment control their plans offer. Policies like automatic enrollment in workplace retirement plans and employer contribution matches have become more common, encouraging working Americans to save more for retirement. But it’s important to preserve this momentum.

Let’s champion policies that protect tax-advantaged retirement accounts!