Unless they get the “nudge” to save more, survey findings from Barclays show a majority of investors will do nothing if they believe they can’t recover from losses.
“The real key to a successful 401(k) is sufficient savings rates,” said Kristi Mitchem, head of Barclays Global Investors’s U.S. Defined Contribution business. “This is why automatic savings features are vital to helping participants help themselves.”
According to the survey of 1,000 401(k) plan participants in March, about half said they would save more to make up for their losses. However, that decreased to nearly one-fourth among those with a low confidence level.
The turmoil has forced participants to take a hard look at their 401(k)s as not a lump-sum income, but in the perspective of monthly income – and the fact that they might outlive their assets is generating a greater desire for guaranteed lifetime income. Forty-nine percent of participants said that guarantee should come from their employer.