Let’s not break our arms patting ourselves on the back.
The vast majority (92 percent) of investors who participate in 401k plans are satisfied with their plans. Participants are also “keenly interested” in additional services that could be offered in 401k plans, according to the latest Wells Fargo/Gallup Investor and Retirement Optimism Index poll.
But there’s room for improvement (a lot).
“As the 401k plan is the most common way for people to save and invest for retirement, it makes sense that people would like to access more extensive retirement-planning features, such as advice that factors all of their assets into their retirement income estimates and asset allocation strategy,” Joe Ready, head of Wells Fargo Institutional Retirement and Trust, said in a statement. “That’s the next step in the retirement industry—to help participants get the answers they need to their complex retirement income and distribution questions.”
One possible improvement, according to the company, could give investors the option of purchasing professional advice through their 401k plans.
The index finds that “non-retired investors” (participants) are interested in a wide range of professional advice and services that could be offered through such a plan:
- 70 percent of non-retirees with a 401k are interested in receiving advice on how to optimize their Social Security benefit in retirement.
- Roughly six in 10 are interested in receiving professional advice on developing a retirement income plan and being able to customize target date funds to the exact year they plan to retire.
- More than four in 10 non-retired investors are interested in the following: getting advice that is based on all of their assets, not just their 401k plan; having their investments automatically rebalanced each year to match their target asset allocation; and receiving advice for how to allocate their 401k assets.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.