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401k Financial Advice Desired by Participants

401k Financial Advice

401k Financial Advice Desired by Participants

401k financial advice helps plan participants get the most out of their plan.  Obtaining financial advice from their retirement plan providers can be a top priority for the majority of workers. A question for many plan sponsors becomes, As a plan sponsor, is providing 401k financial advice as a feature of your retirement plan at the top of your priority list?

According to a recent survey from T. Rowe Price, 64% of workers turn to their 401(k) plan provider as their first source for 401k financial advice. Surprisingly, that includes advice outside of retirement planning. Moreover, workers’ demand for 401k financial advice has increased since 2017. In short, workers are seeking 401k financial advice; more specifically, from their employer and/or their plan service providers.

Workers are looking for more 401k financial advice from their retirement plan provider. According to the T. Rowe survey, the top four retirement-related financial objectives workers said they needed help with are:

  • Managing a plan to convert your retirement assets into a stream of income for your retirement (80%)
  • Saving for retirement outside your workplace plan or plans, including traditional contributory (not rollover) IRAs and savings accounts (74%)
  • Saving to fund health care expenses in retirement (74%)
  • Saving for retirement through your current 401(k) or other workplace retirement plans currently held by you or other members of your household (71%)

Drilling down, workers are most interested in getting 401k financial advice from their retirement plan provider in the form of help with selecting investments, figuring how much they need to save, and tracking their progress and course correcting as needed. Specifically, 36% said they desired advice on how much to set aside to convert their retirement savings into a steady stream of income for retirement, while 34% said they would like advice on how much to save outside of their workplace retirement plan. When it comes to paying for healthcare expenses in retirement, 32% said they could use some guidance, and 31% are looking for advice on how much to save in their workplace retirement plan. In addition, 64% of those T. Rowe surveyed said they’d like advice on using health savings accounts (HSAs) for long-term investment purposes to fund their healthcare expenses in retirement.

What’s more, employees not only need 401k financial advice — they want it. And they want to receive 401k financial advice from their retirement plan provider. The T. Rowe Price research bears this out, as does research released earlier this year from Prudential Financial. A survey conducted on Prudential’s behalf found that 76% of U.S. employees believe employers should have a “meaningful role” in providing opportunities for them to be successful. The survey respondents ranked access to workplace retirement plans and other wealth-building tools as benefits that would be the most helpful.

In short, don’t leave employees hanging when it comes to helping them get 401k financial advice from their retirement plan provider at work. Successful retirement outcomes start with making sure employees receive the help and education they need to make informed decisions about how to save for their post-work years. As the research shows, workers don’t want to go it alone, and they’re only too happy to accept help from their employer.

  1. Rowe Price’s findings are based on an online survey of 3,005 adults who are currently contributing to a 401(k) plan and have an account balance of at least $1,000. 
Robyn Kurdek

Robyn Kurdek

Freelance writer with nearly 2 decades of financial industry experience, with niche expertise in the defined contribution (DC) industry. I also have defined benefit (DB) plan knowledge. I write all types of content for retirement plan participants, sponsors and advisors, including web copy, newsletters, white papers, fact sheets, blog posts, financial wellness articles, and more. "I speak DC."
Robyn Kurdek
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