Many Workers Lack Awareness of What’s in Their Retirement Account (and Want Help)
60% trust their plan providers and investment companies to help them reach their retirement goals, a new study suggests.
With inflation running rampant—despite slowing slightly, year-on-year inflation sat at 8.5 percent in July—individuals have to invest. But according to a new survey from Principal Financial Group, that’s something most workers aren’t comfortable doing.
The survey, which looked at data from almost 700 U.S. residents, found that while a third of workers are comfortable making their own investments, more than half want someone else to make their investment decisions to help them reach their retirement goals. This creates a huge opportunity for plan sponsors.
In fact, almost one in three survey participants said they don’t even know what their money is invested in, and the number-one feeling they reported was “not confident.”
While exact reasons for this discomfort vary, a few main concerns united survey respondents, including worrying about not being able to keep up with inflation, fears of long periods of investment losses, and concerns they do not have anyone whose investment advice they can trust.
Although survey respondents don’t trust themselves with their investments, they do have faith in their financial advisers. Three in five of those surveyed said they trust retirement plan providers with their money, and when individuals seek out investment assistance, their confidence in their investments increases by more than 85 percent. That suggests financial guidance and advising could be a path to confidence for more investors.
The research acknowledges that financial constraints can be a concern for those who don’t have access to free financial planning. But it also notes that many people, especially young people, may have access to free financial planning services through their employer.
“This [financial planning assistance], combined with the plan’s qualified default investment alternatives (QDIA) and explaining QDIA benefits, could be valuable and easy ways for them to help build their retirement security—and their investment know-how and confidence,” the report says.
From: BenefitsPRO