Only about half (52%) of individuals participating in defined contribution (DC) retirement savings plans believe they are “on track” for retirement, but BlackRock says retirement confidence is within reach for many more.
BlackRock’s DC Pulse Survey of 1,003 DC plan participants found 28% reported feeling “unsure” about whether they are on track for retirement. The survey revealed people “unsure” about their retirement prospects are much more likely than those “on track” to admit that “I don’t know as much as I should about investing for my retirement” (66% vs. 38%, respectively) and “I don’t know how much money I need to save in order to fund the retirement I want” (68% vs. 32%, respectively).
“Unsure” participants also are less likely to be taking proactive steps to improve their knowledge. For example, just 11% of those “unsure” have calculated the amount of money to set aside now for retirement (compared with 35% of those “on track”). Similarly, just one-quarter of “unsure” individuals have developed a good sense of how to generate ongoing retirement income from their savings (vs. 68% of people “on track”).
According to BlackRock’s analysis, the link between a basic understanding of key retirement planning principles and retirement confidence holds true for people at all income levels—suggesting that such confidence is not simply a function of greater financial resources.
“Unfortunately, many individuals who consider themselves ‘off track’ face financial realities requiring support beyond their DC plan,” says Anne Ackerley, head of BlackRock’s U.S. & Canada Defined Contribution Group. “But the good news is that people who are unsure about their retirement standing may be able to build their confidence with relative ease by working in the near term to close critical knowledge and saving gaps.” NEXT: Lack of DC plan engagement