21 November 2018

Help Getting Retirement Ready

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PARTICIPANTS in 401(k) plans prefer more proactive steps to increase their retirement readiness. Specifically, participants would like more analysis, suggested solutions and a better understanding of the tools and guidance offered by their retirement plan provider to help them optimize the use of their retirement plan, according to recent research.

Nearly half of participants feel they are behind schedule in saving for retirement, and three in five wish their employer did more to educate them about their retirement plan, according to the fourth annual "2012 DC Participant Experience Study" by KK & Company and Greenwald & Associates.

Four in five trust the recommendations of their plan provider, and the same number reported that they were very interested in learning more about retirement planning.

Many participants have false confidence in the effectiveness of their efforts to save for retirement, the study revealed. Of the 54% of respondents who believe their savings for retirement are on schedule or ahead of schedule, half are older than age 35 and have less than $240,000 saved in their defined contribution (DC) account, with 26% having less than $100,000 saved.

| Many participants have false confidence in the effectiveness of their efforts to save for retirement, the study revealed. |

The study also found that most participants are extremely or very interested in having their statements include projections of how much they need and will have in their plan at retirement age if they continue their contributions. Three approaches to projections were tested in the survey, and participants favored the one based on a continuation of contribution rates.

"[The American worker is] looking for more insights on how to prepare and manage for retirement rather than understanding the rules and mechanics of their 401(k) plan," said Mathew Green­ wald of Greenwald & Associates.

Information for the study was gathered through 17-minute interviews with 1,018 plan participants, using the Research Now online panel. - Kristen Heinzinger 

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