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.