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