According to the American Express Personal Economy Survey, slightly more than one-third of all individuals have three or more retirement accounts, while one out of every six people own five or more accounts, a news release said.
Further, while three out of every four workers have a 401k account with their current employer, almost 30% left their retirement assets in the workplace plan at their old job. Yet, a large majority of those surveyed said they liked having their retirement savings invested in more than one place.
Craig Brimhall, vice president of Wealth Strategies at American Express Financial Advisors said investors may have a false sense of being well diversified, believing that owning different accounts equates to diversification.
“Multiple account ownership is becoming more common because fewer and fewer Americans are staying with one company or one career over their lifetime. Yet multiple retirement accounts may be problematic, particularly if they are the same kind of account,” warned Brimhall, in the announcement. “It is far more difficult and time-consuming to track asset performance, stay diversified, and to manage risk and distributions from your savings if the money is invested in a variety of different retirement accounts.”
Part of the disconnect could lie in some fundamental misunderstandings, the poll found. Seven out of 10 of all households with employer-sponsored retirement accounts mistakenly believe that they pay no management fees. Also, more than a third (35%) of investors spent one to three hours last year reviewing their retirement accounts, while one quarter spent no time at all on their accounts.
Additional findings include:
- over two-fifths of households have less than $50,000 invested in their retirement accounts
- more than one in 10 do not know how much money they have saved for retirement
- more than one in 10 can not identify the type of retirement account they own
- 72% of American’s own a 401k account with their current employer. 32% have 401k accounts with an old job.
The survey was conducted in November 2003 by American Express Global Marketplace Insights and covered 894 American households with at least one retirement plan.