Almost 90 percent of workers consider a 401(k) plan to be a must-have benefit, about the same proportion who believe the same about health insurance, a new survey found.

Inflation is also affecting peoples’ concerns; 62 percent of the 1,000 workers with U.S. 401(k) plans surveyed between April 19 and May 2 for Charles Schwab’s August 2023 401(k) Participant Study cited inflation as an obstacle to saving for a comfortable retirement. That number is up from 45 percent last year. Forty-two percent said that stock market volatility is another obstacle, up from 33 percent last year.

The respondents were also less optimistic about achieving their own retirement goals. Only 37 percent reported being “very likely” to meet their goals, down from 47 percent last year. The proportion of those who thought that they were “somewhat likely” to reach their goals was 49 percent, up from 40 percent last year.  

Workers said that they would need an average of $1.8 million in retirement savings.

More respondents reported increases in their savings methods this year, compared to last year. Specifically, 68 percent are using savings accounts, compared to 61 percent last year; 47 percent are investing in IRAs, compared to 33 percent last year; and 38 percent are investing through a brokerage account, compared to 29 percent last year. But one method was decidedly less popular this year, compared to last. The percentage of those who used cryptocurrency as a savings and investment vehicle dropped from 25 percent last year to 14 percent this year.

Sixty percent of the respondents expected their retirement income to come from multiple sources other than a 401(k), with 20 percent expecting that other source to be Social Security.

“Despite these challenges, retirement saving continues to be a priority for workers, who have maintained their 401(k) savings rates and largely stayed on top of their 401(k) investments over the past year,” said Brian Bender, head of Schwab Workplace Financial Services, CPA Practice Advisor reported.

To learn more about employee benefit plans, register to attend the Foundation for Accounting Education's Employee Benefit Plan Update & Hot Topics for Experienced Auditors Webinar on Dec. 14.