PLANADVISER.com published a survey of employees who participated in a 401(k) plan and the numbers were eye-opening.
Nearly three in four (76%) said they need professional assistance with elements of retirement planning such as how much to save and how to allocate their investments.
For example, when it comes determining a comfortable retirement income, 53% estimated they would need less than 75% of their pre-retirement salary. However, most financial experts cite this figure as too low. In any case, only 13% of employees believe they are on track to replace 75% or more of their pre-retirement income. Four in 10 do not have a specific target of how much to save for retirement, and less than 30% believe their savings will last throughout their retirement.
The problem for most 401(k) participants is that (1) they don’t know who to ask, and (2) most investment advisors won’t provide them advice. There are a number of reasons for this. Many people are reluctant to approach stock brokers, thinking either that they have too little money to interest them or afraid they will be “sold” something. From advisor’s perspective, the assets in a 401(k) are not a source of fees or commissions and therefore, he is not interested in spending time giving free advice.
Employees can get help with their 401(k) plans if they go to a Registered Investment Advisor (RIA) who provides advice on an hourly basis. We would be happy to discuss this with employees seeking help with their 401(k).