Participants do read those quarterly statements, as it turns out. In fact, 92% of the participant respondents to a new Putnam survey say they look at their statements “all the time.” And, contrary to what one might think after three years of soft investment returns, more than three-fourths say they review them carefully, according to Beth Pasciucco, Director of Marketing, Communications & Education at the firm, who unveiled the results at Putnam’s 2003 Client Conference in Boston yesterday.
While one might expect a fair amount of regret and recriminations about their 401(k) investments, given a chance to rethink the financial decisions of the past 12 months, the Putnam data reveals that 37% of participants said they would have “more aggressively reallocated” to take advantage of the buying opportunity.
Additionally, a whopping 85% of participant respondents say that retirement is their primary savings goal, a level Pasciucco described as “unprecedented” compared with historical patterns of 67% or so. However, on a cautionary note, the survey indicated that setting aside money for an emergency fund and paying down debt have displaced the traditional #2 savings goal – college.
Confident, Not Enough
More than half (54%) of participant respondents say they know how much they will need to live in retirement – yet a comparable 53% say they are not confident they will have enough. While participants indicate they tap into a wide variety of sources for investment counsel, half cite “myself” as the primary source in making investment decisions. That suggests that participants are accepting responsibility for making these decisions, according to Pasciucco. As an interesting side note, roughly two-thirds of the 200-odd plan sponsors in attendance at the conference thought participants would cite “the company that manages the plan” as the primary source.
Still, 71% of participants who have actually initiated a change in their account balance spent less than 3 hours researching that move – about the same length of time as for a large appliance purchase. At the same time, while 74% say they are getting “enough” information on a volume basis to make those decisions, they also expressed a desire for clarity in the information they receive.
There was little surprise in participant plans for the next 12 months – 98% said they planned “no change” in their retirement accounts. While that is hardly a shift from traditional patterns – participants have demonstrated little inclination to tinker with their retirement accounts – there may be extenuating concerns. More than one in three say they are worried about losing their jobs, whereas Pasciucco notes that that concern level has been running in the 20% range. Despite that, more than half (53%) of workers over age 39 say they have considered delaying their retirement, as have 42% of all participant respondents.
The Putnam Participant Poll of 2,161 active participants – including a national sample of 1,644 and more than 500 Putnam participants – was fielded February 25 to March 20, 2003, by Brightwork Partners.