Inheriting the financial burdens of the past
To effectively plan for the decade, Voya Financial set out to understand factors impacting the ability to achieve financial wellness and retirement readiness. We sought out thought leaders on retirement and workplace issues to provide their predictions and expectations for how the decade of the 2020s would unfold in a variety of areas pertaining to the workforce.
We’ve created a series of four blog posts summarizing our key findings and learnings:
- Inheriting the financial burdens of the past
- Future of workplace benefits
- Hope for the future: The opportunity for transformative enhancement of retirement plans
- The changing world of work…and retirement
Read on for the first installment in the series: Inheriting the financial burdens of the past.
The decade of the 2020s will clearly pose major challenges to those seeking to help American workers achieve financial security throughout retirement. But challenges may be balanced with advances in technology and other innovations that will yield positive results.
In the coming years, employees are likely to face mounting financial pressures and higher costs as they try to save for retirement. Thought leaders also identify several financial challenges that will impact our economy and retirees from now until 2030, including pressure facing Medicare and Social Security. More than 50% of respondents feel that it is very likely or certain that legislation will be passed in the decade to prevent the depletion of the Social Security Trust Fund. The impact on retirees may be compounded by the belief of two-thirds of respondents that Medicare premiums will increase more quickly than the rate of inflation.
Progress for retirement plans
Nearly 7 in 10 (69%) also believe that income taxes will rise for individuals with incomes of less than $250,000. The impact this would have on paychecks could be compounded by the prediction that the majority of employees will be paying more out-of-pocket for employee benefits in the future.
The economic challenges that aging baby boomers face are likely to have a strong economic impact, due to the sheer number of people in this generation. Thought leaders also believe the country could face other economic challenges, including market volatility and low interest rates.
Economic challenges are compounded by the fact Americans have little savings outside of their retirement plans. Only 4 in 10 (39%) working Americans have enough savings to cover two months or less of expenses.
To dive deeper into The 2020s: A decade of workplace challenges and opportunities:
Source: The 2020s: A decade of workplace challenges and opportunities – Views from thought leaders. Produced by Voya Research and Insights and Greenwald Research, March, 2021
For plan sponsor/TPA, Institutional use only. Not for public distribution.
Research material is provided for general and educational purposes only.
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Mathew Greenwald and Associates is not affiliated with the Voya® family of companies.