Most importantly, the survey found that investment confidence nearly doubles when workers have the help of a financial professional. Approximately one-third (32%) of survey participants expressed confidence in making the right 401(k) investment choices based on their own ability, compared to 61 percent if they also had the help of a financial professional.
“Getting more workers engaged in professional 401(k) advice should be a top priority for employers. We’ve seen the positive impact it can have on both behaviors and outcomes,” said Anderson. “At Schwab Retirement Plan Services, Inc., 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,” he noted.*
Other findings show respondents are engaged and place a priority on their 401(k):
- Save it, don’t spend it: Given a choice about how to use a $5,000 bonus, nearly two-thirds (64%) would save it in their 401(k) rather than take the cash now. Forty-eight percent immediately chose the 401(k) route and an additional 16% chose the 401(k) after tax consequences were explained.
- Post-crisis recovery: Seventy-four percent of respondents said their 401(k)s have recovered from the financial crisis about as fast or even faster than expected.
- Check the index: Nearly three-quarters (74%) would rather pay low investment fees for index funds than pay higher fees for actively managed funds that could potentially outperform the market, but may also carry greater risk.
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