More US retirement savers feel ‘off track’, BlackRock survey shows

Receive free US economy updates

We’ll send you a myFT Daily Digest email rounding up the latest US economy news every morning.

US retirement plan participants have become markedly more gloomy in the past two years about their ability to save for old age, according to a new BlackRock study, which warned high inflation and volatile markets are making people economically anxious.

The report by the $9.4tn money manager found that the share of US retirement savers who feel they are “off track” has more than doubled since 2021 to 24 per cent. The share who feel “on track” has fallen 13 percentage points from a 2021 peak to 56 per cent, the lowest level since the survey began eight years ago.

Nearly 30 per cent of all retirement savers now plan to work for longer because of economic conditions, according to the survey. Higher interest rates and last year’s poor results in equity and bond markets have left many retirement savers confused about where to put their money.

The shift is particularly marked among younger workers, with 31 per cent of them saying they are off track. That raises concerns they will lose faith in the long-term value of 401(k) and other retirement savings plans and reduce contributions.

Anne Ackerley, head of retirement at BlackRock, said: “Gen Z has had the biggest drop in confidence. They haven’t been through this before. Almost three-quarters of them are saying they don’t know how to invest and they are looking to their employers for help.”

The findings dovetail with other explorations of the public mood. An annual survey by Edelman, the communications group, this year found the share of the global public that expects their family will be better off in five years plummeted 10 percentage points year on year to 40 per cent, and in the US the figure was even lower at 36 per cent.

At the same time, the Edelman survey found 78 per cent of those queried trust their employer, compared to just 50 per cent who trust their government and the media.

The BlackRock research found the recent volatility has also increased interest in retirement products that protect defined contribution plan participants from big market swings.

Fully 90 per cent of employees surveyed say they would be interested in putting at least a portion of their savings into a product that provides a guaranteed income, up from 76 per cent two years ago. Twelve large plan sponsors, with $24bn in assets and 500,000 participants, are experimenting with making such an offering their default option.