Voya reveals 'severe impact' on retirement savings due to tariffs

Employees are feeling the impact of tariffs on their retirement saving strategies, and employers will need to keep up with market trends to keep workers on track. 

According to Voya's Financial Tariffs Omnibus Survey Report, over one-third of employees reported a severe impact on their ability to save for retirement, due to tariffs and economic uncertainty. Retirement, making major purchases and affording daily expenses were three major areas of concern for workers today. 

Read more: How to tailor your financial wellness benefits to meet generational needs

Additionally, nearly two-thirds of employees have made financial changes in response to market volatility, including reducing discretionary spending, increasing emergency savings and adjusting investments, according to Voya's research. These behavioral shifts reflect a broader concern among workers about long-term economic conditions, with a majority anticipating higher prices, a potential recession, increased unemployment and rising interest rates as consequences of the tariffs.

Retirement readiness at risk

It's critical employers offer retirement benefits and work with employees to maximize their impact during times of economic instability. Flexible retirement plans with features such as matching contributions and access to financial guidance can help employees stay on track despite uncertainty. 

Life-long income solutions are also growing in popularity, as employees spend years saving but less time understanding how to spend down their savings. While just 19% of employees participated in a pension plan as of 2023, adding these options to 401(k)s is becoming more essential for benefit managers and plan sponsors to consider. 

Read more: How benefit managers can maximize 401(k) plans

"Not everybody has the same ability to figure out long-term finances, or even the discipline or the means, and we're asking them to figure out how to make it last for 20 or 30 or 40 years," Mindy Zatto, founding principal at Strategic Benefits Advisors, previously told EBN. "Plan sponsors are starting to see that if employees can't retire because they don't know how long their money will last, we've got an employment issue." 

Financial education is key

Voya's data reveals a clear need for greater financial education and advisory resources, too, as many employees appear unsure about how to navigate their options during volatile periods. While 77% of workers view financial wellness programs as an important benefit, only 28% of employers offer them, according to a 2023 Transamerica Institute report. But supporting employees' long-term financial wellness can not only improve individual outcomes but also enhance workforce stability, engagement and resilience. 

Read more: What benefit managers should know about employees' approach to retirement

"As we continue to witness a growing need for improved financial literacy driven by external factors such as inflation and economic uncertainty, businesses must recognize the significant impact that poor financial well-being can have on their employees," said Tim Perkins, co-founder and CEO at nudge, a financial wellness tool.