Editor’s Note: This article was originally published on paychex.com and is shared here as part of a sponsored media agreement.
An already-concerning U.S. savings crisis has been exacerbated over the past half decade by a once-in-a-century pandemic and a political climate that has seen very little focus on nor results for helping the average American. A lack of emergency funds, lack of long-term savings, layoffs and furloughs, housing insecurity, nagging inflation, and rising credit card debt are just some of the challenges that have left Americans struggling to make ends meet — let alone save toward retirement.
The Federal Reserve Bank’s 2022 Economic Well Being of U.S. Households report revealed that 28% of non-retired adults did not have any retirement savings — an increase of 3% since 2021. On the other hand, almost three-quarters of non-retired adults said they had at least some retirement savings, with 54% of those indicating their money was in a defined contribution plan such as a 401(k) or 403(b).
There were also generational differences associated with savings, with 57% of those ages 18 to 29 saying they had some retirement savings and 24% of that group indicating they were on track. The older the individuals, the higher the percentage of those who had some retirement savings (45 to 59 at 81% and 60+ at 88%).
As more workers contend with their ability to save during and after their working years, you may want to consider the advantages of a retirement plan offering at your business.
Why Aren’t More Americans Saving for Retirement?
Not saving for retirement often correlates with financial challenges elsewhere in an individual’s life. Trouble covering current living expenses today makes it difficult to plan and save for a retirement that could still be decades away. The most recent Retirement Confidence Survey by the Employee Benefit Research Institute echoed these sentiments. The survey found that 64% of respondents were only somewhat confident that they will have enough money to take care of basic expenses during retirement.
Other obstacles that can impede retirement include:
- Longer Life Expectancy: Americans today are living longer than those in previous generations. The longer you live, the more money you’ll need, even if it’s to cover just basic expenses.
- Insufficient Social Security Benefits: While retirees currently collect Social Security benefits, there continues to be a looming sentiment that these funds will be cut or run out before individuals will be eligible to begin claiming them.
- Rising Health Insurance Costs: Healthcare premiums have been on the rise for years, and individuals need to prepare for medical costs to increase as they get older. This is why part of sound retirement planning includes accounting for health-related costs.
- Lack of Access to Retirement Options: While an employer-sponsored 401(k) plan is a popular employee benefit, not all businesses offer one, especially smaller companies. According to the U.S. Bureau of Labor Statistics, 68% of private-industry nonunion workers had access to employer-provided retirement plans as of March 2023 but only 52% of the workers participated.
Ways To Improve Retirement Saving for Your Employees
As an employer, you are in a great position to help your employees plan for retirement and make the most of the plan that you offer. Below are some ways you can encourage them to start saving.
Take Advantage of State-Facilitated Retirement Programs
In an effort to help combat a retirement crisis and meet worker demand for more robust retirement plan options, some state governments have implemented their own programs. For example, Oregon has required that every employed individual in the state have access to a retirement savings plan. Since Oregon in 2017, more than half the states have proposed retirement savings legislation, with 19-plus states (and several cities) enacting the legislation. The following states have fully implemented programs as of April 2026:
- California
- Colorado
- Connecticut
- Delaware
- Illinois
- Maine
- Maryland
- Massachusetts
- Minnesota
- Nevada
- New Jersey
- New York
- Oregon
- Rhode Island
- Vermont
- Virginia
Hawaii is in development and a launch date is slated for mid-2026, while Washington state scheduled a July 2027 start date.
Offer a Retirement Plan as Part of Your Employee Benefits Package
When offered as part of a total benefits package, retirement plans are one way to help employees prepare for their future. Smaller employers can add a basic retirement plan option that can help improve hiring and employee retention. Integration with payroll makes servicing and compliance easier than ever. Provisions in the SECURE Act provided a tax credit of up to $5,000 a year over three years and an auto-enrollment credit of $500 a year over three years, for a total tax credit of up to $16,500, for new plans.
Under the SECURE Act 2.0, an employer contribution credit became available. This credit is generally a percentage of the amount contributed by the employer, up to $1,000 per employee. It is limited to employers with 50 or fewer employees and reduced for employers with between 51 and 100 employees.
Your business might even consider a Pooled Employer Plan (PEP), which includes two or more unrelated small businesses coming together under one retirement plan. The benefits to owners are manifold, including the reduction of administrative duties in the plan and the potential cost savings. Owners also reduce their liability because the pooled plan provider takes on most of the fiduciary responsibilities.
Increasing 401(k) Contribution Limits
If your company does offer a retirement savings plan, communicating the benefits of maximizing contributions is essential. In 2026, employees can contribute up to $24,500 toward their 401(k) plans. Those 50 and older may contribute up to a total of $32,500, which includes an additional $8,000 catch-up contribution. Employees ages 60-63 may contribute a total of $35,750, which includes an additional $11,250 catch-up contribution. By keeping updated on the latest retirement plan changes and providing updated information to plan participants, employers can help their staff spread their contributions more evenly throughout the year and achieve their annual savings goals.
Fighting the Retirement Savings Crisis in America
Employers play a crucial role in helping U.S. workers save toward a dignified retirement, particularly as a savings crisis continues to loom throughout the U.S. Company-sponsored defined contribution plans like a 401(k) are not only an essential part of achieving this goal, but they are also a key benefit that many potential employees look for when considering whether to join a company. If you’d like to review your current offerings or add a new plan to your benefits package, consider retirement plan services available on the market today.
