Americans are satisfied with the features of their workplace retirement savings plans and do not favor making any changes that would weaken their control over the investment decisions they make. That was one of the key findings of a new report from the Investment Company Institute released Feb. 6.
Respondents indicated they wanted to keep the government from meddling in their accounts, with the vast majority — 88% — disagreeing that the government should not allow individuals to make their own retirement account investment decisions. Almost as many, 82%, disagreed that the government should invest all retirement accounts in an investment option selected by a government-appointed board of experts.
Respondents were also adamantly opposed to having the government require retirees to annuitize a portion of their retirement balances either through the government or an insurance company. Almost 4 in 5 (79%) disagreed that "the government should require retirees to trade a portion of their retirement plan accounts for a fair contract that promises to pay them income for life from an insurance company." Almost as many, 76%, disagreed that the government should require retirees to secure an annuity from the government.
Respondents would also not be happy if they were deprived of the tax advantages their retirement savings accounts offer, according to the report.
Respondents agreed that the tax advantages of saving in a workplace plan were important, with 82% saying that the tax treatment of their plans was a big incentive to contribute. The overwhelming majority — 87% — disagreed that the government should take away the tax advantages of their retirement savings accounts.
The finding about the importance of tax incentives comes on the heels of a controversial proposal from the Center for Retirement Research at Boston College calling for the elimination or reduction of tax deferrals to bolster Social Security.
The report is based on a survey of 2,035 individuals aged 18 or older in the U.S. The survey was conducted in November and December.