More than 8 in 10 U.S. workers feel more confident about their retirement future if they have the support of a financial advisor.
NEW YORK , Oct. 30, 2024 /PRNewswire/ — Millions of Americans are betting their retirement future on their 401(k), but many are navigating a maze of investment options, fees, and financial decisions. I’m having a hard time getting out of it. However, it is different if you do not have a financial advisor. The first-ever Pontera 401(k) Literacy Study found that plan participants who work with a financial professional feel more confident about their retirement future, are more informed about their plan, and feel more self-motivated. Contributions to accounts have also increased.
The Pontera 401(k) Literacy Study found that plan participants with advisors are literally more knowledgeable, confident, and invested in their workplace retirement plans. On average, advised participants reported giving away 15% of their income, compared to 10% of non-advised participants.
A national survey of 2,010 full-time employed workplace retirement plan participants in 50 states found that 8 out of 10 recommended participants and 100% of baby boomers said they felt more secure and confident. It turned out that they were enjoying. These participants are also more committed to their plans and more likely to maximize their annual contributions than non-advised employees. Other key findings include:
90% of advised respondents believe their 401(k) allocation is consistent with their overall financial plan, compared to 75% of non-advised respondents . Sixty-six percent of participants who received advice maxed out contributions to their work accounts, compared to 40% of participants who did not receive advice. Advised participants say they contribute an average of 15% of their income to a work account, compared to 10% of unadvised participants.
“Our research confirms what we have long declared: that advisors help retirement savers achieve better outcomes,” said Pontera Co-Founder and Chief Executive Officer. Yoav Zuler said. “The amount and complexity of information that must be absorbed can be overwhelming, so having an advisor to educate and guide participants can help them feel more confident investing in their 401(k). It’s heartening to see.”
Pontera, a fintech company with a mission to improve the retirement lives of Americans, provides U.S. We set out to identify the challenges faced by workers. By design, half of respondents employ financial professionals and half do not, so Pontera can compare the knowledge and sentiment of each group to determine whether advisors are influencing their clients regarding workplace planning. You can decide whether
Employer-provided 401(k)s provide the most retirement security for most Americans, as the outlook for Social Security is uncertain and only 15% of private sector workers have access to a defined benefit pension. It is a financial source for More than 85 million workers in the United States have a retirement account at work, and the median household has 45% of their net worth in retirement savings.
Pontera research shows that 81% of retirement savers consider a 401(k) to be the most important part of their retirement savings plan, compared to 67% for traditional IRAs and 61% for both Roth IRAs and pensions. It was confirmed that Americans say there are many reasons to participate in a workplace-sponsored plan, but the most important are employer matching contributions, automatic payroll deductions, investment benefits for pre-tax funds, and tax-deferred growth.
knowledge gap
Still, significant knowledge gaps exist that hinder participants from getting the most out of their retirement accounts. The survey found that 8 in 10 respondents say they experience at least one challenge managing their workplace plans. Similarly, 87% have at least one challenge when choosing investments, and this number rises to 92% for Gen Z respondents. Other findings include:
74% would welcome help from an account management expert, and 77% would be willing to pay for advice. 59% say they have questioned their 401(k) investment decisions. 50% say they are confused understanding their planning options.
Overall, Pontera has found that a significant number of 401(k) participants struggle to fully understand the plan’s contents. As part of the survey, Pontera gave respondents a nine-question 401(k) literacy quiz designed to measure their knowledge of retirement plan features and rules.
The study found that Americans may be overestimating their fluency when it comes to workplace retirement accounts. 6 in 10 401(k) participants consider themselves to be “financially literate,” but 85% could not answer all questions correctly and 46% of respondents received a “C.” I got the following score.
Notably, 74% did not know at what age they could start collecting insurance premiums. Also, many people did not know that they had to pay taxes on early withdrawals. Nearly one-third of 401(k) participants couldn’t remember how much they paid in plan fees.
“Financial literacy is a huge issue in our society when individuals are responsible for saving for retirement,” Zuler said. “These knowledge gaps highlight the critical need to find additional ways to support and educate retirement savers, and financial advisors are well-positioned to provide that assistance. I believe.”
Advisor value
Fortunately, the picture is much brighter for participants who work with financial professionals. Pontera’s research and its own comparisons show that when participants receive individualized support, their 401(k) commitment and sense of security for a secure retirement increase.
Advisors positively impact their clients’ 401(k) accounts in a variety of ways.
81% of respondents who received advice know how much they will pay for their plan, compared to 62% of respondents who did not receive advice. Clients who take advice are more likely to know that recovery can begin after age 50. 51% of Americans with an advisor check their balances and contributions at least weekly, compared to 34% of Americans without an advisor. 48% of recommended participants monitor portfolio performance, compared to 32% of non-recommended participants.
Research shows that advisors help employees manage their retirement plans, including helping participants assess risk tolerance, evaluate tax implications, and allocate assets in line with a comprehensive plan. It helps you overcome complexity. It also helps clients better understand fees, contributions, and investment performance.
“It is clear that enabling personalized 401(k) advice within a plan from a trusted advisor is an important solution to the challenges faced by many retirement savers,” said Pontera. said David Goldman, Chief Business Officer. “Personal guidance from an expert advisor can help close the 401(k) literacy gap, give retirement savers greater peace of mind and prepare for retirement.”
Founded in 2012, Pontera is a fintech company that enables retirement savers to receive personalized 401(k) account management from trusted financial experts through a secure customer-approved platform. Pontera’s enterprise-grade data security, certified under SOC 2 Type II and ISO 27001 standards, allows advisors to view, analyze, and rebalance client accounts, keeping client financial information safe and providing advisor prevents users from making changes to other accounts.
To learn more about the study, download a copy of the 2024 Pontera 401(k) Literacy Survey at info.pontera.com/survey. For more information about Pontera, visit pontera.com and follow us on LinkedIn, Twitter, and Facebook.
About the survey
This survey was conducted by Harris Poll on behalf of Pontera from July 11 to July 15, 2024. All 2,010 respondents were based in the United States, were 18 years of age or older, were employed full-time, and had an employer-sponsored 401(k), 403(b), or 457(b) retirement savings account. . Respondents surveyed were from all 50 states in the United States. The survey was designed to include 50% of respondents who currently work with a financial professional and 50% of respondents without an advisor.
About Pontera
Pontera helps millions of Americans feel better by helping financial advisors view, analyze, and manage their 401(k), 403(b), and other workplace-sponsored plans. We are a fintech company with a mission to help people acquire greater wealth for their retirement. account. Our secure, purpose-built platform integrates seamlessly with advisors’ portfolio management tools, works across many account types, and is designed to help advisors provide comprehensive investment management and improve financial outcomes. Masu. Founded in 2012, Pontera is headquartered in New York, New York. For more information, please visit www.pontera.com.
About Harris Poll
The Harris Poll is one of the longest-running surveys in the United States, tracking public opinion, motivation, and social sentiment since 1963, and now a global consulting and market research firm providing social intelligence in times of change. It is part of Harris Insights & Analytics. . We work with clients in three key areas: building a 21st century corporate reputation, developing brand strategy and tracking performance, and obtaining organic media through public relations research. Our mission is to provide insight and guidance to help leaders make the best decisions possible. For more information, please visit www.theharrispoll.com.
Source Pontera
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