Many working Americans would like their employer to provide more guidance on issues like retirement and general financial planning, according to a study by PlanVision. That desire appears to be largely related to respondents’ “limited understanding” of investing and long-term money management. Similarly, a report from Charles Schwab found that just 58 percent of surveyed U.S. adults said that they know how much money they will need to save in order to achieve their desired retirement lifestyle.
Almost half (47 percent) of respondents also said that the materials provided to help explain their 401(k) investments are likely to only add to their confusion. Unsurprisingly, a 67 percent majority of worker respondents said that they want personalized investment advice for their 401(k), and nearly eight in ten (79 percent) workers said that they would likely turn to an outside professional financial advisor if such assistance is not provided by their employer. Roughly three-fourths (73 percent) of surveyed employees added that such advice would allow them to be “very or extremely confident” in the investment decisions they make.
Even without additional investment advice, workers still highly value their employer-provided 401(k) plans, as evidenced by the 90 percent of respondents who said that they would “think twice about taking a job if the company did not offer a 401(k) plan.” In fact, 73 percent of surveyed workers said that they would rather see their 401(k) balance grow by 15 percent this year than lose 15 pounds, although 29 percent also reported that they have either decreased or not made any changes to their 401(k) savings rate during the past two years.
Such behavior may be related to the 35 percent of surveyed employees who said that they are unwilling to “sacrifice their quality of life today” for a better financial standing down the road. Further, nearly a third of respondents reported that they are allocating their disposable income more to unexpected expenses, monthly bills, and paying off credit card debt than retirement saving. What is worse is that a quarter of survey participants said that they have taken a loan out from their 401(k) recently, something that is especially troubling with 59 percent of workers reporting that this defined contribution plan is their “only or largest” source of retirement savings.
Sources: PlanVision, Charles SchwabPost author: Charles Couch