The survey polled 2,600 workers was broken down into three categories: workers who currently participate in a 401(k) plan, workers who have access to but choose not to contribute to a 401(k) plan, and workers who are uncertain if their employer offers a 401(k) plan.
The survey revealed many respondents were not familiar with what a 401(k) plan is or how to use one in their financial planning. Additionally, those who were not participating in a 401(k) plan were15% less confident in the stock market than those who participate.
Some respondents were unsure if they had access to the option, with 29% responding they had not asked if their employer offered one because they didn’t know what a 401(k) plan was. Other reasons they did not know if one was available were “I don’t need one anyway,” “I don’t know who to ask,” “I’m too busy,” and “I’m reluctant to ask.”
Some respondents acknowledged that a 401(k) plan was available to them, but they decided not to participate. Most, 42%, responded that they had not taken part in a 401(k) plan because they cannot afford it, and 22% said they plan to invest in the future, but haven’t started yet. Nearly a third, 30%, said Social Security would be the largest source of funding for their retirement, while 20% hadn’t contributed to a 401(k) because they are planning to use “other personal savings” A smaller fraction,17%, replied they had no need because they did not plan to retire and would always work, while 12% said there are other saving priorities.
Although those participating in 401(k)s were more likely to know the basics, many were unfamiliar with some common terms, such as asset allocation. The survey found nearly half, 48%, of respondents believed it pertained to company match, which some said it was choosing a percentage of salary to invest in a 401(k) plan, or having money taken out of their paycheck to go into a 401(k) plan.
The survey was conducted by BIGresearch, a consumer market intelligence firm based in Columbus, Ohio.