The majority of American workers in a new survey accept responsibility for financing their own retirement and are relying primarily on their 401(k) to get them there, but many lack the confidence to effectively manage their retirement savings.
Steve Anderson, Executive Vice President of Schwab Retirement Plan Services (Photo: Business Wire)
The nationwide survey of more than 1,000 401(k) plan participants, commissioned by Schwab Retirement Plan Services (“Schwab”), shows a high level of self-reliance among respondents. Roughly nine in ten (89%) say they are counting on themselves for the money to support their retirement, and just five percent expect to rely mostly on the government for financial help after they stop working full time.
This self-reliance is fueled by anticipated use of 401(k) plans. A large majority of survey respondents (61%) report the 401(k) is their only or largest source of retirement savings. More than half of respondents (55%) have increased their savings rate in the last two years and most (70%) say their 401(k) is in better shape now than ever before.
“It’s gratifying to see so many people taking the reins of their retirement,” said Steve Anderson, head of Schwab Retirement Plan Services. “In our view, contributing to a 401(k) plan should be the number one savings priority for workers. Planning ahead, taking action and getting the help you need along the way are key steps to help build sufficient retirement savings.”Still, many are unsure how to invest… Interestingly, the survey reveals that saving in a 401(k) is not enough to ensure confidence for many participants. For example:
- More than half (52%) find explanations of their 401(k) investments more confusing than explanations of their health care benefits (48%).
- Fifty-seven percent wish there was an easier way to figure out how to choose the right 401(k) investments.
- Nearly half (46%) don’t feel they know what their best investment options are and one-third (34%) feel a lot of stress over correctly allocating their 401(k) dollars.