The fall brings with it landmark cultural events: Halloween, Thanksgiving, major moments in the sports calendar like the baseball playoffs and the start of football season.
The fall also brings a moment for many employees across the country that is just as important as those cultural touchstones: the workplace open enrollment period, when employees make benefit selections for themselves and their family members, including health and dental insurance.
Open enrollment is a vital time to make sure that you are taking advantage of everything your workplace offers to address your physical health, but it is also a key time for a check-up on your financial health.
In fact, the open enrollment period is a key opportunity to take action for your retirement planning. Corebridge Financial’s recent research found that more than 80% of Americans think it’s a good idea to review retirement savings plans during open enrollment.
We asked Terri Fiedler, President of Retirement Services at Corebridge, a few questions about the major takeaways from the research and how Americans can take action to move their financial futures forward this fall.
Employees most commonly associate open enrollment with health benefits. Why should they also be thinking about their workplace retirement plans during this period?
Open enrollment is a time when many of us review the benefits that strengthen our physical health, but it is also a time of year where we have an opportunity to better utilize the benefits that strengthen our financial health, such as our workplace retirement plans.
This can be such a powerful time to take action because adding even a few percentage points more to your contribution amount can have a lasting impact on your savings power. For example, someone making $50,000 per year who contributes 6% of each paycheck would hypothetically see their retirement savings grow to $375,470 over 30 years if we assume an 8% rate of return on investments. But if that same person increased contributions to 8%, their savings would grow to $500,627 over 30 years, not accounting for employer contributions, salary increases or other factors that can help grow retirement accounts.
Our research found that those who plan ahead for open enrollment are much more likely to have a positive outlook on retirement. Why is that?
As a broad generalization, those who plan ahead for open enrollment are more likely to feel positively about their retirement because they are more likely to use the benefits selection process to take action toward maximizing their retirement potential.
Forty-two percent of people who prepare for open enrollment say they will review their plan contributions this cycle and 48% plan to increase contributions. Compare that to those who do not prepare ahead of time: Just 25% of that group say they will review their contribution amount, and just 19% intend to increase contributions.
With the difference between a 6% and 8% contribution per month potentially adding up to hundreds of thousands of dollars in retirement savings, it stands to reason that those who prepare ahead and feel confident in increasing their contribution amounts feel better about their retirements than those who do not.
What were some of the generational differences on how employees approach retirement planning during open enrollment?
One exciting data point from our research is that younger employees are eager to save. Gen Z were the most likely to say they will increase plan contributions by 2% or more during this open enrollment period, with over half (51%) indicating they plan to do so.
Meanwhile, 36% of Millennials, 27% of Gen X, and 16% of Baby Boomers plan to increase their retirement plan contributions by at least 2% this year.
Earlier this year, we found that Gen Z are precocious financial planners, with 73% reporting that they “got serious” about financial planning before their 25th birthday. It’s great to see that this approach from younger people is carrying through as they prepare for benefits selections.
What retirement planning actions should employees consider heading into open enrollment?
The first step is to make sure you’re enrolled in your workplace retirement plan if you’re eligible. It’s never too early or too late to start saving. Of course, the sooner you start the more time you have to put your money to work for you. Starting sooner can also help avoid having to invest larger sums of money down the road in attempts to get back on track.
If you’re already enrolled, the most impactful retirement action you can take during open enrollment is to contribute as much as you can. But understandably, many are unsure what percentage of their salary they can actually afford to put away into their retirement account.
That’s where a financial professional comes in. By meeting with an advisor or another financial professional in the weeks leading up to open enrollment, you can identify what contribution level is most appropriate based on your savings goals and your current financial situation.
And the good news is that you might be able to get that professional advice for free. Some retirement plan providers, including Corebridge Financial, offer free access to professional support for plan participants.
With the confidence of professional advice behind you, you can go into open enrollment with a clear action plan for how you will adjust your contributions for this year.
During open enrollment season, a little planning can go a long way – particularly when it comes to preparing for retirement. For more resources to help move your financial future forward this open enrollment period, check out and book mark our Insights & Education resource.
