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Retirement Planning > Retirement Investing

401(k) Savers Want Advice on How Much They Need for Retirement: Schwab

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Two in five 401(k) participants want help in determining how much they will need to save for retirement, according to survey results released last week by Schwab Retirement Plan Services.

Sixty-eight percent of respondents estimated that their retirement savings would last 24 years, on average. The remaining 32% did not how their savings would last, including 40% of women and 25% of men surveyed.

On average, study participants said they planned to retire at age 65 and estimated they would need to save $1.9 million for retirement.

Respondents said they would like help or advice anticipating tax expenses, determining their retirement age, creating an income stream in retirement and investing their 401(k).

People planning for retirement must constantly balance between saving and spending, and in retirement they must ensure that their savings will last, Catherine Golladay, head of workplace financial services at Charles Schwab, said in a statement.

“Talking to a financial professional can provide important clarity regardless of where you are on that journey,” Gollady said. “Even if you think your financial situation doesn’t warrant outside help, having that conversation with a professional is a valuable step to take.”

Indeed, the study found a significant increase in participants’ confidence in making investment decisions in their 401(k) when they received the help of a financial professional.

Forty-nine percent of respondents reported that they would be very confident in their investment decisions with help, compared with only 32% who felt very confident on their own. Yet only half of those surveyed said their situation warranted financial advice.

Logica Research conducted the survey between May 28 and June 11 among 1,000 401(k) plan participants 25 to 70 years old who worked for companies with at least 25 employees. Survey respondents were not asked whether they had 401(k)s with Schwab Retirement Plan Services.

The Retirement Landscape

Where will retirement income come from? Survey participants said 44% of it would come from their own or a partner’s 401(k), while the remainder would come from these other sources:

  • Social Security – 17%
  • Savings and investments – 15%
  • Traditional pensions/defined benefit plans – 10%
  • Part-time work – 4%
  • Inheritance – 3%
  • Annuities/insurance – 3%
  • Real estate income – 2%

Contribution rates reflect the importance that participants are placing in their 401(k)s, according to Schwab.

Twenty-six percent of respondents said they had contributed the maximum allowed in 2019. In addition, the average amount participants contributed to their 401(k)s was up 20% over the previous year: $10,562 in 2019 vs. $8,788 in 2018.

Outside their 401(k), 57% of respondents said they were using a savings account to save for retirement, while 48% were investing for retirement in an IRA and 38% in a brokerage account.

“While consistent, disciplined savings habits are critically important, the investment choices typically available to you through an IRA or health savings account may have more growth potential, for example, than deposits in a regular savings account,” Golladay said.


Seventy-seven percent of 401(k) participants in the survey said they were offered an HSA at their workplace, and 45% currently used it. For many, their HSA is helping to pay for their current health insurance deductibles or unexpected short-term health care costs.

In addition, two in five said they currently use their HSA to save for health care costs in retirement. In last year’s survey, 33% reported they had contributed enough to their HSA to cover their immediate needs and for money for retirement.

Golladay noted that workplaces are increasingly adding HSAs to their lineup of financial wellness solutions for employees. Long term, she said, this will contribute to people’s retirement security.

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