• 61% report that the 401(k) is their only or largest source of savings;
• 55% have increased their savings rate in the past two years; and
• 70% say their plan is in better shape than ever.
However, that savings in a 401(k) is not enough to instill confidence for many participants:
• 52% find their investment explanations are even more confusing than those of their health benefits;
• 57% would like an easier way to determine the best investments; and
• 34% feel stress over allocating their plan dollars correctly.
Of the workers surveyed, 61% want personalized investment advice on everything from asset allocation to risk tolerance and retirement income planning. Investment confidence nearly doubled when workers have the help of a financial professional. More than two in three respondents (61%) expressed confidence in making the right choices with professional advice, compared with one in three (32%) who relied on only their own abilities.
“Getting more workers engaged in professional 401(k) advice should be a top priority for employers,” says Steve Anderson, head of Schwab Retirement Plan Services. “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.”
Sounds like sound advice.