Nearly 90% of Jobseekers Consider 401(k) a ‘Must-Have’ Benefit

For jobseekers, a 401(k) plan is becoming a non-negotiable benefit, new data shows.   

Nearly nine out of 10 participants (88%) considered a 401(k) a must-have benefit when looking for a new job—second only to health insurance, at 90%—and more than three in four 401(k) participants would refuse a new job if it did not offer one, the Charles Schwab 2023 401(k) Participant Study found.

“Placing such a high priority on their 401(k) is not surprising since it is their primary retirement resource, with workers counting on it to deliver 40% of their retirement income,” Marci Stewart, director of communication consulting and participant education for Schwab Workplace Financial Services, stated in a press release accompanying the research. “That’s double what workers expect from the next closest source, which is Social Security, at 20% of retirement income.”

Life insurance ranked third in the employee must-have benefit rankings at 36%, the data showed. 

Despite increased challenges from inflation and market volatility affecting participants, “retirement saving continues to be a priority for workers, who have maintained their 401(k) savings rates and largely stayed on top of their 401(k) investments over the past year,” Brian Bender, head of Schwab Workplace Financial Services, said in the release.

Comparatively, more workers are also saving for retirement than last year outside of their workplace retirement plan: 68% vs 61% in a savings account, 47% vs 33% in an IRA and 38% vs 29% investing through a brokerage account. These savers are looking to bolster their primary retirement fund with other methods of saving and investing, according to Schwab.

More than seven out of 10 (71%) employed Americans were more likely to stay with an employer that offered an employer-sponsored 401(k), 403(b) or 457 retirement savings plan, an increase from 60% in a 2022 survey, according to the “Voya Consumer Omnibus Research: Retirement Report Q2 2023” from Voya Financial, published earlier this year.

The Schwab survey found that inflation and market volatility continue to weigh on plan participants’ retirement planning, citing statistics including:

• Inflation, at 62% of respondents, and market volatility, at 42%, are obstacles to saving for a comfortable retirement. Nearly eight in ten respondents, or 78%, say these conditions are impacting their spending and saving habits, and 36% plan to delay retirement.
• Workers say they will need to save an average of $1.8 million for retirement, with 37% of workers thinking it’s very likely they’ll achieve this target, down by 10% from last year. But workers are still hopeful: nearly half still feel somewhat likely to reach their goals and only 14% feel they are not at all likely to reach their goals; and
• When respondents were asked whether they agreed or disagreed they would like personal advice most workers (73%) say they would like personalized advice on their 401(k) plan, and separately, 39% say they are already receiving such advice through their plan at work when respondents were asked in what areas they would like help with retirement planning They would like help with basic retirement planning and understanding how the new SECURE 2.0 law affects their retirement plan.

The online survey of 1,000 U.S. 401(k) plan participants was conducted by Logica Research between April 19 and May 2, 2023. Survey respondents were actively employed by companies with at least 25 employees, were 401(k) plan participants and were 21-70 years old.