Yesterday we looked at a study from BlackRock which highlighted the growing disconnect between plan sponsors and participants in relation to perceived retirement readiness. Another important finding from this same study is that younger workers may be a bit overoptimistic when it comes to their ability to retire comfortably and on time. Specifically, 59 percent of surveyed Millennials currently participating in an employer-sponsored retirement plan said that they “feel on track for retirement,” a higher level of reported confidence than both Generation X (43 percent) and Baby Boomer (54 percent) respondents. However, only 36 percent of Millennial participants said that they increase their retirement plan contribution rate when possible, and just 38 percent reported that they regularly monitor the performance of their investments.
Encouragingly, surveyed Millennials were found to generally value help from their employers with retirement planning more than other generations, which means that sponsors have the ability to make a meaningful and positive impact on younger workers’ savings behavior well before this group nears the age of retirement. Among all participant age groups, though, there is a clear desire for more employer-provided assistance when it comes to saving and planning for retirement. For example, 55 percent of all surveyed participants said that they believe plan sponsors should do more to help participants prepare for retirement. However, there is definitely still room for improvement because just 30 percent of participant respondents said that they are currently satisfied with how their employer helps them identify ways to generate income from savings. Further, only about a quarter of surveyed workers said that they believe sponsors are doing an adequate job of offering guidance on how much to save (27 percent), minimizing plan-related fees (26 percent), and informing participants of their current level of retirement readiness (25 percent).
Sources: BlackRockPost author: Charles Couch