28% of workers have $0 saved for retirement: Employers, tailor your messaging

A new survey found that many Americans are not contributing to retirement savings plans or have nothing saved currently.

The study, from GOBankingRates, surveyed more than 1,000 adults and found that 28% of respondents said they had nothing saved for the future, with 39% saying they aren’t currently  contributing to a retirement fund. The survey also found that 30% of respondents said they didn’t think they’d ever be able to retire.

GOBankingRates quoted several industry experts who analyzed the findings. According to those sources, the lack of savings by workers fits with other research. “The statistic that [28%] of Americans have $0 saved for retirement is alarming but not surprising,” said retirement planning expert Mike Kojonen, founder and owner of Principal Preservation Services. “Through countless consultations, I’ve observed a prevalent lack of awareness about the cost of retirement and a significant underestimation of how much needs to be saved.”

It’s not just lack of awareness

The survey made another interesting point: most people have a general idea of how much savings they will need for retirement. More than 50% said in the survey they expected to need from $500,000 to more than $1 million in retirement savings. Yet most are not saving at a rate to reach those numbers.

“Nearly three out of four people — 71% — are heading toward retirement with five-figure nest eggs at best: 10% have $50,000 to $100,000, 33% have less than $50,000 and 28% have exactly zero dollars saved for retirement,” the report said.

In a separate interview about the study, Laura Rogers, director of workplace solutions at OneDigital Retirement + Wealth, said that although many workers may have a good idea of what they will need, they are still lacking a realistic plan to get there. She noted that Americans are increasingly looking to employers to provide the resources they need for a good retirement planning. “More and more, people are looking to their employers for support with financial challenges and wellbeing,” she said. “Leading employers are looking for ways to include financial planning, education, and advice in their benefits, as well as recognizing the interconnectivity of financial health with physical and mental health.”

Taking advantage of tax-advantage savings accounts

The industry experts say there is a real opportunity for workers to get the most bang out of their savings buck by using tax-advantaged savings accounts such as 401(k) and traditional IRAs. The GOBankingRates study noted that many people are missing out on these types of plans, which can reduce taxable income.

“Thirty-nine percent — more than triple the second-biggest group [from the survey] — contribute nothing to tax-advantaged retirement accounts,” the report said. “The No. 2 largest share, just under 13%, contributes only 1% to 3% of their income. Another roughly 13% contribute a healthier 4% to 6%.”

Rogers said that many simply may feel they don’t understand the tools available. “The retirement goal can be daunting. Once we understand what our goal is – we then need to determine the best tools to reach those goals. Employers spend a lot of money and time offering robust benefits packages, but offering the programs is not enough on its own. Communicating benefits in a coordinated, tailored way will help people understand how to maximize the impact for their specific situation.” She added it’s not enough to simply offer employees a retirement benefit; they must understand what will work best for them.

Some younger workers are on the right path

The study found that some workers in younger generations seem to be figuring out what they need to do for retirement. “An impressive 16% of 18- to 24-year-olds put 4% to 6% of their incomes in a tax-advantaged retirement account, more than any other demographic. Another 8% contribute a hefty 7% to 9% — also more than any other age group — and one in 10 are sheltering 10% of each paycheck in a tax-privileged account for their golden years,” the report said.

Related: Urgent wake-up call: 60% of Gen Z, millennials have less than $5K in retirement savings

However, the report said, older workers may not have the luxury of decades of future growth in their accounts—they need to do more now. Providing meaningful help in making the best decisions is critical for those workers. “We must meet people where they are in their financial journey,” Rogers said. “Whether it’s their stage in life, generational preferences or technological savviness – people have unique needs. It is imperative that we make resources available in a variety of ways (paper, online, live in person, etc.) and tailor our messaging appropriately.”