Most 401(k) Participants Desire More Plan Education, Says Study
KK Company and Greenwald Associates’ Fourth Annual 2012 DC Participation Experience Study found that about 60 percent of 401(k) plan participants want to be more educated about their retirement plan options. The study said that 401(k) participants want their companies to provide additional plan analysis tools and guidance to help optimize retirement plan usage. Nearly half of plan participants felt they were not saving enough for retirement.
“The American worker is aware and concerned about their retirement. They are 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 Greenwald.
Most survey respondents reported being very interested in receiving plan projections of their expected financial need at their time of retirement given their current rate of contribution. The study also found that many employees have a sense of undue confidence in their retirement readiness. Over half of survey respondents felt that their savings was on track or ahead of schedule and one half of those were over 35 years of age with less than $250,000 in retirement savings; over one-quarter had less than $100,000.
“Less than half of participants have tried to calculate the required amount to replace their salary for retirement. The question this raises is obvious: Without having a goal, how can they manage their progress and expectations?” said Kendall Kay of KK Company. “Every participant should be provided this calculation automatically if they are in a 401k plan.”