Digital DC disruptor Vestwell is out with the results of its latest study, which found 76.7% of those with a company-sponsored plan are saving 4% or more of their salary each month (excluding any additional savings from a company match).
“Not only are those with access to a plan saving, but they also feel confident about decisions regarding their plan,” the company notes. “In fact, 62.5% say they’re comfortable with their knowledge around their retirement plan, which means people are either educating themselves or receiving proper education from the plan administrator or sponsor.”
It means employees are taking advantage of retirement plans when given the opportunity.
The February study, titled The Retirement Advantage: A look into how company-sponsored retirement plans positively impact consumer behavior, surveyed 672 employees who were eligible to participate in their company-sponsored 401k or 403b plans, 499 of whom completed it in its entirety.
Key findings
- Employees who have access to a company-sponsored 401k or 403b plan are taking advantage of the opportunity—almost 80% of them are saving greater than 4% of their salary each month.
- 59.5% of respondents say they’re comfortable with their knowledge around their retirement plan, which means people are either educating themselves or receiving proper education from the plan administrator or sponsor.
- 64.7% of participants know they need to be putting aside the recommended 10% or more of their monthly salary to retire comfortably.
- Younger generations need education on the concept of compound interest and the significant impact to long-term savings; only 25.7% of 25-34-year-old respondents are saving greater than 10% in contrast with 44.2% of respondents age 55-64.
- Simple participant education ideas can make a great impact; after hearing one Investopedia statistic about the benefit of saving early, 21.7% of respondents said they plan to increase their contribution.
- 67.3% of respondents said they know where to find their retirement fees suggesting that fee confusion may not be as acute as perceived.