Do you sponsor a 401(k) plan? Do you participate in a 401(k) plan? I would bet that if you live in the US that at least one of these is true, otherwise you wouldn't be reading this.
NEWS FLASH: A recent Wells Fargo survey indicates that many participants do not know how much money they will need for retirement. However, 79% said they want more advice from their employers. Further, large numbers (spanning all 5 generations, presumably Boomer, X, Y, Millennial, and Z) would favor legislative and or regulatory change to facilitate the provision of such advice by employers.
82% of respondents said that a lifetime income option should be made available. Why is it then that in situations where the plan does not offer such an option, virtually nobody buys their own annuities? Could annuity design be bad? Is pricing bad? Are the participants from the ' do as I say not as I do mold?
Perhaps most alarming is that 56% of 50-somethings are confident or very confident that they will have the money they need to maintain their existing lifestyle in retirement, yet the median retirement savings of those aged 50-59 is just $29,000 according to the survey. I agree that this is alarming -- very alarming. But, I am going to call out Wells Fargo on this one. How do you know that their median retirement savings are only $29,000? Do they have all their retirement savings with your bank? Are you sure? I have one 401(k) account balance with something less than $15,000 in it at the age of 53. Does that make me unprepared? Does whoever would be researching me know if I have any pensions? Do I have any IRAs? Outside investments? Other 401(k)s? I've seen this sort of statement many times from most (perhaps all) of the big players in the recordkeeping business. Shame on all of them.
I'll go back to being nicer now. I agree with most of Wells Fargo's conclusions. The current system isn't working. Congress needs to be part of the solution and IMHO, they have more frequently been a big part of the problem.