A nationwide survey of more than 1,000 401(k) plan participants released today by Schwab Retirement Services found that 89 percent of workers are counting on their 401(k) savings to support their retirement. However, the majority of workers lack the confidence to effectively manage their retirement savings.
When workers have help from a financial advisor, their investment confidence nearly doubles, the survey found. Sixty-one percent of the survey participants had confidence in making the right 401(k) investment choices when they made those choices with the help of an advisor. Only about half (32 percent) expressed confidence when making investment choices based on their own ability.
The respondents said they would like guidance on everything from asset allocation to risk tolerance and retirement income planning, says Schwab.
“Participants who used third-party, professional 401(k) advice tended to increase their savings rate, were better diversified and stayed the course in their investing decisions,” said Steve Anderson, head of Schwab Retirement Plan Services.
Almost two-thirds of the respondents reported that their 401(k) is either their only source of retirement savings or the largest source. However, 52 percent find their 401(k) investments to be more confusing than their health-care benefits.
Fifty-seven percent of the respondents wished there were an easier way to figure out how to choose the right 401(k) investments. Forty-six percent didn't know what their best investment options were and one-third felt a lot of stress over correctly allocating their 401(k) dollars.