Retirement Savings Regret High Among 401k Plan Participants

401k, retirement, saving, American Century Investments

This man is NOT happy about his retirement saving decisions thus far.

Youth is wasted on the young, George Bernard Shaw quipped, and that apparently applies to retirement saving. Not surprisingly, some nine out of 10 plan participants feel at least some regret about saving for their future, according to a new survey from by American Century Investments.

The study looked at participant thoughts and perspectives on retirement savings. The survey focused on employee regrets about saving, the value they place on their retirement plans and their reliance on employers’ influence and guidance.

“Not saving for retirement was cited as the most common personal regret—more than not being a better person or having better personal relationships,” American Century Investments Vice President of Client Marketing Diane Gallagher said in a statement. “People recognize the importance of saving but lack that general direction or push to get started.”

Key study findings include:

Regret

Pre-retirees (age 55 to 65) who report having a great deal of regret has risen five percent in the past two years, according to the survey, and More than four out of 10 see retirement as their biggest financial goal.

Other survey insights include:

“We continue to see this disconnect in people knowing what they ‘should do’ against what they actually do with respect to saving. Although participants recognize that responsibility and gravity, they still struggle with overcoming inertia to move forward,” Gallagher said.

Employee Benefits

The influence of employers on participants saving for retirement cannot be overstated, according to the study:

“The idea that employees would accept a higher match over higher salary may have implications for plan sponsors and their consultants in structuring compensation and benefit programs,” Gallagher said. “It is certainly a perspective that is worth examining within a particular organization.’

Reliance on employer

Automatic plan features are increasingly important to participants, according to the research.

“Participants are really looking to employers to establish defaults around saving rates and investments to help them get started,” Gallagher said.

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