People familiar with their retirement plan investment options are nearly twice as likely to save 10% or more of their annual income compared to people who say they aren’t familiar with investment options in their retirement plan, according to a survey published Wednesday by TIAA-CREF.
The survey found that 39% of people who said they were familiar with their plans’ investment options saved more than 10% of their annual income, but only 21% who weren’t familiar with the plans’ investment options exceeded the 10% savings rate threshold.
The survey also found that 18% of respondents in a retirement plan said they weren’t familiar at all with the investment options while another 15% were “not that familiar.”
Although TIAA-CREF expected that a percentage of respondents wouldn’t be familiar with their plans’ investment options, the result is “alarming in and of itself,” David Ray, a vice president and national sales manager, said in an interview.
“It’s hard to get employees engaged,” even though they are taking on more responsibilities as defined contribution plans become more prevalent for retirement savings, Mr. Ray said.
The TIAA-CREF survey also found that 18% of respondents said their retirement plans offered too many investment options, while another 18% said the plans offered too few. The survey didn’t ask for a specific number. Fifty-nine percent said the number of options in their plans was the “right number,” while 5% said they didn’t know.
The responses were based on a telephone survey conducted in early January of a random sample nationwide of 1,017 adults 18 years or older. The survey was conducted by KRC Research.