While Fidelity’s study found that company stock plans are the number two savings vehicle of choice for many participants, most (52%) could only “generally” explain it and more than one in ten (11%) said that they could not explain their employee stock plan “at all.”
The Fidelity Stock Plan Services study – which looked at the behaviors of more than 1,900 stock plan participants at 130 companies nationwide – reveals that the majority (52%) purchased or exercised stock grants in the past and 70% sold shares obtained via their company’s stock plan. About one in four (26%) used the proceeds from a stock sale to pay down credit card debt or other bills, 13% reinvested the proceeds into their retirement plan and 11% used them for an emergency need.
However, a press release said, many participants surveyed (35%) said they don’t know the tax implications of selling their stock. When looking for support in making these decisions, 10% said they don’t research investment information and another 15% said they make all of their decisions on their own.
Only 18% said investment advisers are the first place they go for investment information. One-fifth (20%) said they go to brokerage services Web sites and another 13% turn to friends and family (including their spouse).“Our research indicates that, although stock plan participants are in many ways financially savvy and save aggressively, there remains a clear need for better education on how stock plan assets can contribute to long-term financial success,” said Joan Bloom, senior vice president in Fidelity’s Stock Plan Services business, in the press release.
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