Stressing about 401(k) retirement plans is very common among Americans according to a new survey. It overrides other factors such as job security. The top retirement stress of Millennials is a bit different. Experts believe that people stress more about retirement because it’s an unknown element of their lives and they need help to figure it all out. Some employers are helping the employees to get trained on financial management but a bulk of them is not doing so.
The Survey Highlighting 401(k) Retirement Plans Stress
The survey that highlighted the fact about Americans being stressed over the 401(k) retirement plans was conducted by Schwab Retirement Plan Services. The aim of the survey was to check the pulse of the 401(k) plans at a national level. It found out that 40 percent of the Americans who are the participants of the 401(k) are stressed about saving enough for enjoying a comfortable retirement.
This stress surpasses other financial stresses of an average American such as 24 percent people are worried about job security, 21 percent are worried about paying the credit card debts and 20 percent are worried about keeping up with the monthly expenses.
The retirement related worries of 24 percent of Millennials is the worry related to paying off the student loans.
The Senior Vice President of the 401(k) business of Charles Schwab, Catherine Golladay stated that there are some other factors that influence the retirement saving stress. She named uncertainty, fear and market volatility among these factors. She believes that when people have to pay a credit card loan, they know that amount but when they think of retirement, they have no idea how much money would be enough.
These people need help in figuring out how much they need to save, when they can afford to retire, how much tax expenses they would need to bear in retirement and what will be their core expenses in retirement.
It is clear that the employers need to do something about the 401(k) retirement plans stress situation. They need to educate employees on how to prepare for retirement in the best manner by offering financial advice and training from time to time. They also need to automatically enroll all the employees in managed accounts because there they get professional advice for an annual fee. Unfortunately, only a few employers have taken these steps and a lot of them are still lagging behind.