Education Is Not Always the Answer: The research also shows that despite increases in the utilization and appeal of TDFs, participants continue to have striking misconceptions about them.
- Myth 1 - Account balance is guaranteed: While 67% of TDF users understand the asset-allocation strategy (or glide path) associated with this type of investment, 34% said they believe their TDF account balance is guaranteed never to go down.
- Myth 2 - Sufficient income is guaranteed: 37% of participants surveyed said they believe a TDF guarantees that their income needs will be met in retirement.
- What employees want most: 67% of participants said the single most important feature they want from their DC plan is a steady income stream in retirement.
- Strong appeal for secure income TDFs: Nearly 80% of current TDF users found a TDF with secure income stream features appealing - as did 53% of non-TDF users and 47% of non-plan participants.