Professional advice is key to getting your retirement nest egg in shape
A majority of participants in 401(k) plans say the investment choices are harder to understand than their health insurance benefits.
According to results of a participant survey released today by The Charles Schwab Corp., 52% of respondents find that explanations of their 401(k) investments are more confusing than explanations of health benefits (48%).
As a result, participants are clearly puzzled about choosing the right investment mix. Of the 1,004 people surveyed, 57% said they wish there were an easier way to figure out how to choose the right investments, and 46% don't know what their best investment options are.
This lack of knowledge creates a lot of stress for 34% of the sample.
Confusion “is a common theme we've seen” among participants and points to the value of getting some advice, said Steve Anderson, head of Schwab Retirement Plan Services.
Confidence in making investment decisions nearly doubles when workers have some guidance.
When asked how confident they would be in making the right investment decisions if they had the help of a financial professional, 61% said they would be either extremely or very confident. Without advice, only 32% expressed confidence.
Despite qualms about managing their retirement plans, 61% said their 401(k) plan is their only, or their largest, source of retirement income.
The good news? Plan participants said their retirement nest eggs are in decent shape overall.
Some 70% said their 401(k) is in better shape now than ever before, and three-quarters (74%) believe that their 401(k) has recovered from the financial crisis as fast, or faster, than they had expected.
Fifty-five percent have increased their 401(k) contributions in the past two years.
