Columbus, Ohio (Feb. 11, 2004) -- Many workers may let their lack of information about 401(k) plans and retirement planning and fear of the stock market prevent them from investing for retirement, according to a survey commissioned by Nationwide Financial.
“Many people don’t have a realistic picture of their retirement needs, and what they don’t know can hurt them,” said Michael Butler, senior vice president of NFS Distributors Inc., a division of Nationwide Financial.
The survey of 2,600 workers, conducted by consumer market intelligence firm BIGresearch, looked at three groups: workers who currently participate in a 401(k) plan, workers who have access to a 401(k) plan but don’t contribute to it, and workers who are uncertain if their employer offers a 401(k) plan.
Among workers surveyed who have access to a 401(k) plan but choose not to participate, 42 percent said they don’t contribute because they can’t afford it, 12 percent say they have more pressing saving priorities, and 22 percent say they plan to invest, but haven’t gotten around to it yet. In addition, 17 percent said they’ll never stop working and don’t plan to retire; almost 30 percent said they’re counting on Social Security to be the largest source of funding for their retirement, and 20 percent plan to use “other personal savings,” Nationwide reported.
Respondents who are uncertain if their employer offers a 401(k) plan cited not knowing what a 401(k) plan is as their greatest reason for not finding out if their employer offers one (29 percent).
Among workers who are participating in a 401(k) plan, many don’t understand some common investing terms, such as “asset allocation,” according to the poll. Almost half (48 percent) believe it has to do with taking advantage of a company match, while others think it’s about choosing a percentage of salary to invest or having money taken out of their paycheck to go into a 401(k) plan.
-- WebCPA staff
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