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Survey: Advisors Would Boost Confidence, But…

Roughly three-quarters (74%) of those surveyed said they’d feel very or extremely confident making 401(k) decisions with the help of a financial professional.

Left to their own devices, only 44% would feel that same level of confidence. And yet, only 10% of participants surveyed are currently using professional 401(k) investment advice.

Those findings come from a new nationwide survey from Schwab Retirement Plan Services, Inc. finds that saving enough money for a comfortable retirement is the most common financial stress inducer for people of all ages. The survey also reveals that most (90%) people view the 401(k) as a “must-have” workplace benefit. Little wonder since the survey of 1,000 401(k) plan participants finds that building adequate retirement savings was cited most often (40%) as a significant source of financial stress in respondents’ lives – even more than job security (24%), paying off credit card debt (21%) or keeping up with monthly expenses (20%).

Millennial Stress Points

Despite having more time to accumulate retirement savings, Millennials also named saving for retirement (38%) a significant source of financial stress — above all others, including:

  • 29% - monthly expenses

  • 26% - credit card debt, and

  • 24% - student loans

Mission Impossible?

About half (49%) of survey respondents feel it is impossible to save enough in their 401(k) for a comfortable retirement. Of course, just 43% say they know how much money they may need for a comfortable retirement, which is significantly lower than awareness of other important targets in their lives, including ideal credit score (91%), weight (90%) or blood pressure (77%).

Only half (51%) of respondents feel totally on top of their 401(k) and more than one-third (35%) are stressed about choosing the right 401(k) investments. One-third (34%) either have not increased, or in some cases have actually decreased, their contributions in the past two years.

Preference for Personalized

According to the survey, 401(k) participants feel that having professional assistance may help improve their financial situations, with the majority of participants (70%) saying they’d like personalized investment advice for their 401(k) plans.
The survey shows that participants also want help setting specific benchmarks for their retirement, including:

  • 46% - calculating how much money they need to save for retirement

  • 43% - determining at what age they can afford to retire

  • 39% - figuring out what their expenses will be in retirement

  • 38% - anticipating tax expenses in retirement

The vast majority (85%) of respondents say they would be interested in using a financial wellness program if it were offered by their employer. The survey found that people already are managing basic financial tasks at work, including:

  • paying bills (67%);

  • taking care of personal financial issues (62%);

  • managing their 401(k) (56%); and

  • checking up on non-retirement investment accounts (41%).

This online survey of U.S. 401(k) participants was conducted by Koski Research for Schwab Retirement Plan Services, Inc. The survey is based on 1,000 interviews and has a 3% margin of error at the 95% confidence level. Survey respondents worked for companies with at least 25 employees, were current contributors to their 401(k) plans and were 25-70 years old. The survey was conducted between June 2 and June 8, 2016.