Ackerley agrees that advisors are key factors in overcoming retirement planning fears.
“The more clearly clients can plan toward a ‘retirement paycheck,” she says, “the greater their confidence is likely to be.”
One investment tool that employers increasingly opt for a way to reach retirement funding goals are target date funds (TDFs), the BlackRock survey said. The poll found that 80 percent of plan sponsors agree that “plan participants would benefit from a TDF that has a feature that generates guaranteed retirement income.”
The BlackRock poll also found that participants increasingly want income generating options in a retirement plan. “About two-thirds (65 percent) say they would save more for retirement if their plan had an option providing guaranteed income.”
Karn says TDFs can make sense, but they should be used carefully.
“Some of these funds have a heavy bond component. You need to examine each one and be sure it is appropriate for each client,” according to Karn.
The BlackRock DC Pulse polled 228 large defined contribution (DC) plan sponsors and 1,033 plan participants in the U.S. The poll was taken by Market Strategies International.
The plan sponsors who were interviewed had at least $300 million in assets, with nearly 40% of the respondents serving in benefits or human resources roles, and the rest in finance, investment or business management for their organizations.
The plan participants surveyed were employed full-time and participating in their employer’s 401(k) or 403(b) plan, with at least $5,000 in assets in their current account.