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TheStreet Open House

Target Date Fund Investors More Confident About Reaching Retirement Goals

NEW YORK, April 15, 2014 /PRNewswire/ -- Individuals investing in a target date fund within their workplace defined contribution (DC) retirement plan feel more confident about investing and meeting their retirement goals than those that don't use target date funds, according to recently updated survey results from Voya Financial's Investment Management business.

The survey was conducted by ING U.S. Investment Management, which plans to rebrand as Voya Investment Management in May 2014. ING U.S. Investment Management is part of Voya Financial, Inc., which recently rebranded from ING U.S., Inc.

In the survey, " Participant Preferences in Target Date Funds: An Update," more than half (56%) of target date fund (TDF) investors felt confident they would meet their retirement goals. In comparison, just over four-in-ten (41%) of non-TDF investors felt confident about their retirement savings. Further reinforcing this confidence among TDF investors is the survey's finding that nearly two-thirds (64%) felt they could turn their plan savings into an income stream at retirement, compared with just 43% of non-TDF investors. These findings compare similarly to results of a similar study conducted in 2011.

Overall, more than two-thirds (68%) of plan participants using TDFs reported that the investments alleviated the stress of retirement planning, increased their confidence that they were making good investment decisions, and helped them feel more assured they could meet their retirement income goals.

Target Date Fund Investors Contribute MoreThe survey also found that TDF investors contribute more to their retirement plans. Forty-two percent of TDF investors contribute more than 11% of their income to their workplace plan. In comparison, just 23% of those who do not invest in TDFs were contributing more than 11% of their income.

"These findings about how target date funds are influencing plan participants' feelings and savings habits provide some powerful insights that both consultants and plan sponsors can act upon," said Bas NieuweWeme, managing director and head of institutional distribution. "Considering the significant increase in the equity markets in 2013, it is noteworthy that the confidence of those that don't invest in target date funds is no stronger than it was in 2011. On the contrary, those that invest in target date funds continue to be more confident than non-target date fund investors, or demonstrating greater levels of retirement readiness."

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