Participants Say They Have the Knowledge, but Do They Use It?

The majority of retirement plan participants surveyed said they have knowledge about their retirement plan and fees, but while the majority also said they know they need to save at least 10% of their salary, many are not doing so.

Nearly eight out of 10 participants, 76.7%, in 401(k) or 403(b) plans are saving more than 4%, according to a survey by Vestwell summarized in its report, “The Retirement Advantage.”

Additionally, 59.5% say they are comfortable with their knowledge about their retirement plan, and 64.7% know they need to save 10% of their salary or more for a comfortable retirement. More than two-thirds, 67.3%, said they know where to find their retirement plan fees. Just over six out of 10, 61.6%, said they engage with their retirement plan. Only 33.5% said they wish they understood more about retirement planning.

However, only 25.7% of those between the ages of 25 and 34 are saving more than 10%, and 44.2% of those between the ages of 55 and 64 are saving this much.

Simple participant education ideas can make a great impact, according to Vestwell; after hearing one Investopedia statistic about the benefit of saving early, 21.7% of respondents said they plan to increase their retirement plan contribution. Another 26.4 said it made them rethink their deferral rate but could not afford to increase it.

Nearly all of those surveyed, 92.9%, said it is important or very important to have enough money to retire at or before age 65. Overall, 42% of Americans have less than $10,000 saved for retirement, but those with access to a retirement plan appear to be putting away much more than that, Vestwell says.

Vestwell’s findings from its survey of 672 employees, conducted in February, can be downloaded here.