More than 60% of employees eligible to participate in 401(k) plans feel unprepared or reluctant to take charge of their retirement plan investments, according to a survey by AllianceBernstein. The survey of 1,000 workers found about 50% of so-called "accidental" investors review their investments only once a year, and 32% do not monitor investments at all.
"As defined contribution plans quickly replace defined benefit plans as the primary retirement savings account for most corporate employees in the United States, a logical assumption would be that employees are ready to accept control of their retirement investments," Dick Davies, senior managing director and head of institutional defined contribution services at AllianceBernstein, said in a news release announcing the study's results. "The high number of accidental investors illustrated in this research shows us that is not the case."
In a separate survey from New York Life Investment Management, most 401(k) plan participants who monitor their investments and feel confident that they are making savvy investment decisions still worry about accruing enough to fund retirement.
The NYLIM survey of 8,958 participants whose plans use the firm as a provider shows 60% agree that they're making correct investment decisions in their 401(k) account, but only 50% believe they know how much money they will need in retirement. Roughly 40% believe they will be able to retire comfortably.
"This research shows us several things — first, that by emphasizing a retirement account balance instead of the amount necessary to retire in comfort, we have all been putting the emphasis on the wrong idea," Don Salama, senior managing director of NYLIM Retirement Plan Services, said in a news release. "Many of these participants monitor their investments carefully, are prepared to take some risk and feel they're making good decisions, but are still worried they won't have enough for the long haul."