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Americans Reprioritizing Benefits, Financial Strategies

Industry Trends and Research

As we approach the second anniversary of the COVID-19 shutdown, a new study by Fidelity Investments finds that consumers have shifted their employee benefit priorities and are adapting their investing habits and attitudes. 

According to the study by Fidelity Investments, nearly two-thirds (63%) of actively investing U.S. adults have changed their investing habits in some way since the start of the pandemic. Of those respondents, 76% of investors are prioritizing long-term over short-term gains and 63% are prioritizing low risk, low reward investments over more risky, high-reward trades. 

In addition, 70% say they are more focused on the money they make from an investment than the type of company they are investing in, the survey found. 

“In the last two years, we saw an increased emphasis on short-term investing and spending habits, but as this period of turmoil from the pandemic, market volatility, inflation and geopolitical events continues, we’re seeing shifts to longer-term planning and saving,” says Roberta King, Vice President and branch leader at a Fidelity Investments Investor Center. “These shifts are impacting how people are choosing to spend, save and invest their money, on their own and through their employer’s retirement plan.”

Following some of the trends from the past two years, Fidelity’s survey has identified three key shifts toward saving and investing for the long-term. 

Adapting their investing habits: Among those Americans actively investing, many have begun: 

  • investing for the first time (9%);
  • increased how much they are investing (20%); and 
  • changed the types of investments they’re making since the beginning of the pandemic (19%). 

They are also prioritizing long-term retirement plans over short-term workplace benefits: 

  • 57% would prefer a higher company match on their current retirement plan than additional paid time off over what they currently get (43%); and 
  • 56% would prefer a strong retirement plan match over full-time remote work (44%).

Interestingly, Fidelity found that consumers ages 18–35 tend to disagree on paid time off. More than half (54%) of these young investors, who are experiencing the combination of these external events for the first time in their lives, would rather have more days away from work than a higher company workplace retirement plan match policy.

Evolving their spending habits: Americans would rather: 

  • put money toward an emergency fund (65%) than spend money on a vacation (35%); 
  • save money for retirement (79%) rather than save money for a wedding or another big event (21%); and
  • contribute $100 toward their 401(k) (62%) rather than spend $100 on a feel-good purchase (38%).

Choosing to put money into their 401(k) over a feel-good purchase is especially true when looking at individuals with a retirement plan (72%), Fidelity notes. In addition, more women (81%) are prioritizing saving for retirement than saving for a wedding or other big live event. 

Uncovering their need for financial education: Half (51%) of those Americans currently investing and/or saving feel like they are not investing as much as they want to be, with 31% attributing it to a lack of knowledge about investing. 

The study found those who work with a financial advisor for help with education and advice are much more likely to prioritize long-term financial goals, choosing things like a more robust company retirement plan match (72% versus 57% overall) over more paid time off (28% versus 43% overall) more than the general population. Budgeting and saving (85%), inflation (81%) and retirement accounts (78%) are the top areas Americans find important to successfully manage their finances.

“This is not the first priority shift we’ve seen from consumers since the start of the pandemic and I doubt it will be the last,” adds King. “We are seeing continued record growth at Fidelity across customers, assets and engagement, in part, by the ongoing market volatility over the last two years, reinforcing the need for financial education.”

The findings are based on an online survey conducted Feb. 17–22, 2022, by YouGov on behalf of Fidelity among 2,557 adults.