Talk about a leap of faith—401(k) participants are confident about their plans, yet many have no idea how their funds are actually invested.
Those are the findings from a recent report from Scarborough Capital Management titled “The 401(k) Pulse: A nationwide survey of how Americans.”
The Annapolis, Maryland-based firm asked a simple, yet pertinent question—do all Americans need help understanding their 401(k)?
They surveyed a bunch of participants to find out.
“A majority (68.7 percent) of Americans are confident or somewhat confident in the investment decisions that have been made for their 401(k) based on retirement goals,” Scarborough writes. “That sounded like a great thing, until we discovered that 22.7 percent of Americans believe they are educated in knowing how their 401(k) is actually invested. A quarter (25.8 percent) do not believe they are educated at all.”
Additionally, it notes, if Americans could start their career over, 68.3 percent would invest more in their 401(k), and only 1.8 percent would invest less.
Among the other findings:
- Women were more likely to have less saved in their 401(k) than men. 17.1 percent of men spend 10 hours a year managing their 401(k) while only 6.2 percent of women spend an equivalent amount of time.
- Nearly two-thirds (61 percent) of those who dipped into their 401(k) would do it again.
- Among 18- to 34-year olds, 46.9 percent believe their 401(k) will fund more than a third of their retirement, while only 29 percent of those older than 55 believe the same thing.
- Of those Americans who have worked with a financial advisor, 95.8 percent would encourage the younger generation to do so.
- Of those surveyed, about 8.2 percent took out money from their 401(k) to put a down payment on a house. About one in five (20.3 percent) have considered dipping into their 401(k) to help pay their child go to college.
- Nearly two-thirds of Americans (63.5 percent) making more than $200,000 a year check their 401(k) more than four times per year, while just 36.8 percent of those making $25,000– $49,999 check their 401(k) that often.