Principal surveys find disconnect around retirement savings,smaller businesses softening after record hiring

Business Record Staff Jan 27, 2025 | 11:19 am
2 min read time
434 wordsAll Latest News, Banking and FinanceU.S. workers are lacking confidence in their retirement readiness despite prioritizing saving, and small to midsize businesses had a softer outlook heading into 2025, recent research from Principal Financial Group found.
The latest Principal Real Life Retirement Journeys Survey shows that 88% of people are building their retirement savings in some way, with 89% using their employers’ retirement plan. Heading into 2025, however, 34% of respondents reported feeling behind on their retirement goals, and 32% are uncertain they will maintain their standard of living after leaving the workforce.
Misconceptions around savings benchmarks and planning for income in retirement are possible reasons for the disconnect, the survey found, but many respondents were open to getting help.
The survey found that 72% of employees are comfortable getting retirement savings help from a financial professional, and 62% are comfortable receiving it from their employer.
“People are seeking more comprehensive help and advice as they plan for retirement, which is increasing the importance of taking a holistic view of their needs in retirement beyond just the amount they need to save,” Chris Littlefield, president of retirement and income solutions at Principal Financial Group, said in a prepared statement.
After record hiring and growth in the first half of 2024, small to midsize businesses reported cautious optimism and stable staffing as they looked ahead to 2025, according to the most recent Principal Financial Well-Being Index.
Survey data shows more than half of business owners (64%) are balancing optimism about their own 12-month outlooks with declining confidence in the U.S. economy, a 14-point decrease, and their local economies, a 12-point decrease, since July 2024.
Economic inflation remains the top concern of employers and employees. Only 44% of employees reported that their wages are keeping up with inflation, according to the survey.
Employer concerns around workforce fell between July 2024 and November 2024, the survey finds. Concerns about employee retention fell from 46% to 32%, while concerns about attracting talent dropped from 39% to 33%.
“We’ve seen ongoing small-business growth, reaching post-pandemic highs in 2024. While we expect to see that growth continue, we could see a slowdown as business owners continue to battle inflation,” Amy Friedrich, president of benefits and protection at Principal, said in a prepared statement. “It will be critical for small to midsize business owners to closely watch the impact of new economic policies — particularly those with tax implications — along with changes in credit and lending markets and adjust accordingly to do what’s right for their employees, customers and the health of their business.”
To read the full results of both surveys, click here.