PEO
Only 28% of Workers Think Their Retirement Savings Plan Will Actually Work
By Insurance Wire Staff, . Insurance Wire.
Most American workers with access to a retirement plan do not think it will be enough. HRO Today covered new research from Gallagher, which surveyed 3,717 US organizations alongside a separate financial health assessment of 981 employees, and the headline finding is stark: only 28% of employees believe their current savings strategy will get them to their retirement goals.
Among workers 55 and older, the pressure is most acute. Thirty percent of that group name retirement planning as their single biggest financial stressor, according to the Gallagher data.
What changed
For years, the benchmark for a competitive benefits package was simply whether a retirement plan existed. Eighty-five percent of employers still offer one. But the SECURE 2.0 Act, a federal law passed to expand retirement savings access, has begun to shift the baseline. The law makes automatic enrollment and automatic escalation (where contribution rates rise gradually over time without the employee having to act) mandatory for most new retirement plans. Fifty-seven percent of employers now use auto-enrollment and 33% use auto-escalation, the Gallagher research found.
The problem is that getting workers into a plan does not guarantee they will retire with enough. That gap is what employers are now trying to close.
What employers are adding
The Gallagher data shows a broad push toward personalized guidance on top of plan access. The survey found that 81% of employers provide self-service financial planning tools, 68% give workers access to one-on-one planning appointments, and 64% offer advice on enrollment and investment selection. Close to half, 48%, offer managed accounts advice, where a professional actively manages an employee's retirement portfolio on their behalf.
Financial stress is part of what is driving the expansion. The Gallagher employee assessment found that 91% of workers see a connection between financial stress and mental health, and 74% say they factor their finances into healthcare decisions. That second figure matters for employers: when workers delay or skip care because of cost, it tends to show up later in higher claims.
The gap that is hardest to close
One finding stands out for what it reveals about the distance between employer offerings and employee reality. On emergency savings, the picture is stark: 51% of employees report having nothing set aside or less than three months of expenses saved. Formal emergency savings programs, however, are offered by just 5% of employers. Workers without a financial cushion are more likely to raid retirement accounts when a crisis hits, which undermines whatever progress auto-enrollment and auto-escalation are making.
Also notable: 46% of employers have not yet implemented optional SECURE 2.0 provisions, or are unsure whether they have. The law includes a range of features beyond mandatory auto-enrollment, and nearly half of plan sponsors appear to be leaving some of them unused.
What to watch
The shift from measuring access to measuring outcomes is real, and the Gallagher data gives it some shape. But the emergency savings gap is the clearest sign that the benefits conversation has not caught up with how workers actually experience financial pressure. For PEO clients and HR teams reviewing plan design, the question worth asking is not just whether a retirement plan is in place, but whether the tools sitting alongside it address the reasons employees cannot stay invested when life gets expensive.
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