UpFront | Published in July 2012

Not a Priority

401(k) participants uninterested in retirement planning

By Rebecca Moore | July 2012

More than half (52%) of 401(k) participants surveyed by Charles Schwab say they lack the time, interest or knowledge to manage their 401(k) portfolios. Nearly three-quarters (73%) spend less than eight hours a year managing their 401(k) plan account. Many (56%) do not review plan-related educational materials they receive.

An interesting finding to consider in light of upcoming participant fee disclosure rules is that nearly one-third of respondents do not know if they pay any fees for their 401(k) plans. Of the 70% aware that they pay some fees, 95% are unaware of investment fund operating expenses, and 67% of plan administration fees.

A significant majority (83%) of those surveyed say they are interested in receiving professional investment management from their employer. However, this interest does not translate into action, based on Schwab data showing that just one in 10 participants actually avail themselves of 401(k) investment management advice when it is offered.

A majority of respondents (61%) have calculated the savings they believe they will need for retirement. Among this group, 84% were confident that their savings would last.

Respondents reported, on average, they feel they need to bridge an eightfold gap between how much they have saved and how much they calculate they will need in retirement.

Findings are from an online survey, conducted last August and September by Koski Research, which gathered 1,005 responses from a national representative sample of U.S. workers who were participating in their company’s 401(k) plan.