Ubiquity’s 2023 State of the Industry Survey

In the fourth quarter of 2022, Ubiquity Retirement + Savings polled over 1,100 401(k) plan participants, plan sponsors, financial advisors, and solo entrepreneurs to take the pulse on their concerns about retirement planning as related to the economy and the state of their businesses. We also wanted a window into their predictions for 2023. The responses we received were somewhat surprising.

While many respondents showed similar concerns, there were also some disparities. The economy was a worry due to the volatility of macroeconomic forces like inflation and recession, and the resulting impacts on the stock markets and investment performance. However, respondents revealed that these fears did not move them to change their retirement planning strategies much, if at all.

Press Releases:
Ubiquity Retirement + Savings “State of the Industry” Survey Reveals Top Concerns for Retirement Plan Decision Makers in 2023

401(k) Plan Participants Rank Crypto Dead Last as Preferred Retirement Saving Asset

As related to impact on 401(k) plans, when able to choose multiple answers:

• Nearly 60% of plan participants and financial advisors agree that inflation is their overall business concern for 2023.
• Approximately 60% of plan sponsors and solo entrepreneurs agree that recession is their biggest concern in 2023.

Nearly all groups felt somewhat prepared for inflation, recession, and poor investment returns:

• 69.8% of solo entrepreneurs
• 56.4% of advisors
• 54.9% of plan sponsors
• 38.9% of plan participants

Inflation impact & 2023 inflation expectations

Respondents had mixed feelings on the impact that inflation, recession, and poor investment returns will have on their business in 2023.

• Plan participants and plan sponsors had the highest expectations of no impact (35.8% and 38.3% respectively)
• Advisors and solo entrepreneurs expected somewhat negative impacts at 33.7% and 55.8% respectively

Wide divergence on where inflation will end up in 2023

Financial advisors (56.4%) and solo entrepreneurs (43.9%) expect inflation to decrease by the end of 2023 compared to where it was in Q4 2022.

Plan sponsors expect inflation to increase by the end of 2023 versus Q4 2022 (57.3%).

Interest rate increase expectations

Plan sponsors, financial advisors, and solo entrepreneurs all expect the Federal Reserve will raise rates two times in 2023.

Saving for retirement & 401(k) behaviors

57.7% of 401(k) plan participants currently think they are not saving enough for retirement. Solo entrepreneurs’ (35.7%) top concern about retirement is saving enough money ahead of retirement.

Despite worries about inflation, recession, poor investment returns, and not saving enough for retirement, no group is expecting a change in behavior when it comes to:

• Increasing or decreasing 401(k) contributions – no change
• Taking more or less risk in their 401(k) – no change
• Taking out a 401(k) loan – no change

No interest in crypto in 401(k) plans

Plan participants rank crypto dead last as their preferred option for saving for retirement

(Respondents could select up to 3)

• 401(k): 84.3%
• Other stock or bond investments: 40.8%
• Savings account: 36.8%
• Real estate: 33.2%
• Checking account: 15.7%
• Other asset: 11.1%
• Gold: 7.3%
• Crypto: 3.5%

Why clients choose Ubiquity Retirement + Savings

Across the board, plan sponsors, financial advisors and solo entrepreneurs choose Ubiquity for our low, flat fees¹ and simple pricing. Plan sponsors love us for our outstanding customer service, which is ranked #1 on Google Reviews, Trustpilot, and the Better Business Bureau.²

Nearly 90% of plan sponsors report that offering a Ubiquity 401(k) is helpful in attracting and retaining talent.

Over 1,100 plan participants, plan sponsors, financial advisors, and solo entrepreneurs were surveyed in Q4 2022. Survey question answers were randomized and responders were anonymized for confidentiality.

Plan Sponsors generally feel ready to face macroeconomic challenges to their 401(k) plans, and most aren’t anticipating a negative impact on their business because of these challenges. Overwhelmingly, plan sponsors feel strongly that offering a Ubiquity 401(k) to their employees is a cost-effective way to attract and retain talent.

Press Release:
Ubiquity Retirement + Savings “State of the Industry” Survey Reveals Vastly Different Inflation Expectations Among Plan Sponsors and Financial Advisors in 2023

Overall top 3 concerns plan sponsors have for 2023 that could impact performance of their plan participants’ 401(k) accounts

(Respondents could pick more than 1)

• Recession: 61.9%
• Inflation: 57.2%
• Poor investment returns: 56.1%

How prepared do plan sponsors feel their business is to face the challenges noted above?

• Somewhat prepared: 54.9%
• Very prepared: 30.6%
• Neither unprepared nor prepared: 18.9%

How do plan sponsors expect these challenges to impact their business in 2023?

• No impact: 38.3%
• Somewhat negatively: 37.1%
• Somewhat positively: 14%
• Very positively: 6%

Plan sponsor 2023 inflation & federal reserve interest rate hike expectations

By a wide margin, plan sponsors expect inflation to INCREASE by the end of 2023 compared to where it was in Q4 2022.

• 57.3% increase in inflation
• 20.2% decrease in inflation
• 22.5% inflation will be the same at the end of 2023 as it is in Q4 2022

Plan sponsors expect two interest rate hikes from the federal reserve in 2023

• 2: 36%
• 3: 16.4%
• 1: 13.3%
• 4+: 10.1%
• 0: 2%

Saving for retirement & 401(k) behaviors

Plan sponsors don’t expect participants to change their behaviors when it comes to managing their 401(k) accounts in 2023.

• 70.3% expect no change in their clients 401(k) contributions
• 52.9% expect no change in clients taking our 401(k) loans despite fears of a recession
• 50.6% expect no change in clients changing their risk appetite in anticipation of poor future returns

Usefulness of Ubiquity 401(k) in recruiting & retaining employees

• Nearly 90% of plan sponsors report offering a Ubiquity 401(k) plan helps them attract and retain employees

Why plan sponsors choose Ubiquity Retirement + Savings

• Plan sponsors choose Ubiquity because of our low costs, flat fee¹ pricing, and how we are the best fit for their company’s savings needs.

Perhaps the most confident group about their financial literacy, solo entrepreneurs are also quite prepared to handle business challenges in 2023. Most of these respondents are making no changes to their retirement contributions, but of those who are, most are not decreasing their risk tolerance. Ubiquity is a favored 401(k) provider to this group because of plan flexibility and options, as well as low pricing.

Press Release:
Plan Participants and Solopreneurs Focus on the Impacts of a Possible Recession, Inflation, and Low Investment Returns for 401(k)s in 2023

Overall top 3 concerns solo entrepreneurs have about 2023 that could impact performance of their 401(k) plan

(Respondents could pick more than 1)

• Recession: 58.1%
• Inflation: 58.1%
• Poor investment returns: 55.8%

How prepared do solo entrepreneurs feel their business is to face the challenges noted above

• 69.8% Somewhat prepared
• 16.3% Very prepared
• 9.3% Neither unprepared nor prepared
• 4.7% Somewhat unprepared

How do solo entrepreneurs expect these challenges will impact their business in 2023

• Somewhat negatively: 55.8%
• No impact: 30.2%
• Somewhat positively: 11.6%
• Very positively: 2.3%

Solo entrepreneurs 2023 inflation & interest rate hike expectations

Vast majority of solo entrepreneurs expect inflation to DECREASE by the end of 2023 compared to where it was in Q4 2022

• 43.9% decrease in inflation
• 34.1% increase in inflation
• 22.0% inflation will be the same at the end of 2023 as it is in Q4 2022

Solo entrepreneurs expect 2 interest rate hikes from the Federal Reserve in 2023

• 2: 36.6%
• 3: 22%
• 1: 9.8%
• 0: 4.9%
• 4+: 2.4%
• No opinion: 24.3%

Solo entrepreneurs’ top concern about retirement is saving enough money ahead of retirement:

• Saving enough money ahead of retirement: 35.7%
• Maintaining my lifestyle: 28.6%
• Leaving a financial legacy for my family: 14.3%
• Running out of money during retirement: 11.9%
• Long-term care expenses: 4.8%
• Covering medical expenses: 2.4%
• Other: 2.3%

69% of solo entrepreneurs rate themselves as high or very high when it comes to financial literacy:

• 35.7% very high
• 33.3% high
• 26.2% average
• 4.9% low

Saving for retirement & 401(k) behaviors

Solo entrepreneurs don’t expect to change their behaviors when it comes to managing their 401(k) plans in 2023

• 60% will make little or no change to their 401(k) contributions
• 52.5% will not take out 401(k) loans
• 52.5% will not change their overall risk appetite and of those who are, 35% are decreasing their risk appetite in 2023

Why solo entrepreneurs choose Ubiquity Retirement + Savings

• Solo entrepreneurs choose Ubiquity because of our low costs and flat fee¹ pricing as well as the depth and breadth of our product offering.