Workplace-sponsored retirement plans are an essential benefit for the majority of workers.
Ninety percent of respondents to a Schwab Retirement Plan Services survey said they would think twice about taking a job if it didn’t have a 401(k) plan.
“When it comes to retirement, there’s been a significant shift of responsibility from employer to employee over the past 30 years, making the 401(k) plan a critical part of the retirement system,” says Steve Anderson, head of Schwab Retirement Plan Services. “Our survey found only one in five participants would be confident in their ability to save for retirement without a 401(k) plan. In fact, participants worry as much about having enough money to enjoy retirement as they do about being healthy enough to enjoy retirement.”
Sixty-eight percent of plan participants believe that making the best 401(k) investment choices is a key priority, even more so than staying in shape, according to Schwab. Seventy-three percent said they would rather have their 401(k) balance grow by 15% this year than lose 15 pounds.
Even though the vast majority of participants said they think a retirement plan is an essential benefit, many admitted that they don’t use it enough because they have competing financial responsibilities.
More than one-third of respondents said they aren’t saving for retirement because they want to take vacations and eat dinner out once in a while. Others cited unexpected expenses, covering monthly bills, paying off credit card debt and saving for education as their main reasons for not saving for retirement.
Nearly half of respondents said that the materials explaining their 401(k) benefits are too complicated and only 58% said they know how much they need to save for retirement.
The one bright note of the survey was that participants said they value professional 401(k) investment advice. Of the 1,000 individuals surveyed, 67% said they would like personalized investment advice for their 401(k) and 79% said they were likely to seek out professional help for making the best 401(k) investment choices.
A very small percentage — 12% — is currently getting professional advice for their 401(k), even though nearly half say they’d expect better performance if they used advice, the survey found.
“Most participants want 401(k) advice, but whether because of inertia or discomfort, many don’t take that first step of asking for help,” says Catherine Golladay, vice president of participant services and administration at Schwab Retirement Plan Services.
Most participants say they don’t expect to rely on Social Security or other government programs to help them in retirement but they do believe politicians should make retirement a national priority.
The survey was conducted online by Koski Research for Schwab Retirement Services between May 26 and June 3, 2015.