Americans of all ages recognize the important role that 401(k) plans play in helping them achieve their retirement savings goals. At least that is what a new report from Charles Schwab suggests, which found that roughly nine in ten surveyed U.S. workers view a 401(k) as a “must-have” employer-provided benefit. Younger respondents were especially fond of this tax-advantaged savings vehicle, which is to be expected since self-funding will be key to their retirement success given the uncertainty that still surrounds the long-term availability of Social Security.
In fact, 78 percent of surveyed Millennials anticipate that their 401(k) will be their “largest or only” source of retirement income. Encouragingly, Gen-Y appears to already be taking the right steps to ensure old-age financial security. Eighty percent of surveyed Millennials, for instance, said that they are caught up on bills and have some money left over at the end of each month. Roughly a third of these respondents said that the extra funds are added to their 401(k), and a quarter reported that any disposable income is put to work in the stock market. Further, 51 percent of Millennials said that fees influence their choice of 401(k) investments “a lot,” while only 40 percent of Gen-Xers and 38 percent of Baby Boomers reported the same.
Surveyed Millennials were also a lot more likely than older Americans to say that they are “very or extremely confident” making investment decisions on their own. However, young adults still seem quite receptive to professional financial help. For example, nearly two-thirds of Gen-Y respondents said that they believe their financial situation warrants professional advice, and 80 percent reported that they would like personalized investment advice for their 401(k). Charles Schwab’s Catherine Golladay added that “No matter what stage of your career you’re in, a financial professional can offer guidance to help you make the most of your retirement investments.”
Sources: Schwab Retirement Plan ServicesPost author: Charles Couch