J.D. Power’s first survey of investors in 401(k) plans has a few surprises. For instance, millennials top other demographic groups when it comes to setting specific retirement goals and having the highest amount of savings relative to age.
The research firm’s inaugural poll included 9,500 responses collected earlier this year. It measured how investors feel about their interactions with live and digital channels; investment and service offerings; fees and expenses; plan features; information resources; and communications.
“The fact that many in the youngest generation of plan participants are actively preparing for retirement now sends a clear message to providers,” according to Mike Foy, senior director of J.D. Power’s Wealth Management Practice.
“They need to be focused on upping their game on their digital and mobile offerings to meet the expectations of this digitally engaged customer segment …,” Foy explained, “to benefit from rollover events when employees eventually leave their jobs.”
Today, about $5.3 trillion is invested in 401(k) plans. The 2018 study’s key findings are:
Only one-fifth of 401(k) participants intend to roll over savings to their current plan providers: Despite the “money in motion” opportunity, just 20% of current group plan participants say they “definitely will” roll over these retirement assets to their current plan providers; however, they survey finds that for participants who are digitally engaged, aware of guidance and education resources, and experience transparency around fees, this rollover likelihood jumps to almost one-half, 48%.
Millennials are most prepared for retirement: 51% of millennials have set specific retirement goals vs. 44% of Gen Xers and boomers — of the 51%, 83% say they believe they are on track to meet them; plus, 61% of millennials have $25,000 or more in total retirement savings, and 27% have more than $100,000 (with an average of 30 to 35 years before retirement).
Boomers are missing the mark: The poll finds that 75% of boomers have more than $100,000 in savings with an average of three years until retirement age; but the average boomer will hit age 65 with only 3.4 years of current income saved, far short of the recommended 10 years.
Check out the gallery above to see which plans ranked the highest among investors.
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