More 401 (K) Participants Seeking Professional Help


Although most workers accept responsibility for financing their retirement and rely primarily on their 401(k) plans to get them there, many workers aren’t sure that they can manage the 401k plans effectively, according to a Schwab Retirement Plan Services nationwide survey with more than 1,000 participants. Nearly nine in ten participants (89%) believe they’ll be responsible for funding their “golden years” through a 401(k). The anticipated use of these plans fuels this self-reliance:

• 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.