Survey: Most 401(k) participants not saving enough
By Paula Aven Gladych
Most investors between the ages of 21 and 50 are focused on saving for retirement, but most are not saving enough.
An online survey conducted by Harris Interactive on behalf of T. Rowe Price in August also found that some investors are not even sure how much they are saving.
The survey also found that nine out of 10 of those surveyed who had access to an employer’s 401(k) plan are currently contributing to the plan. Seventy-two percent said that saving for retirement is their top financial goal, followed by maintaining or improving their current lifestyle (50 percent), creating or adding to an emergency fund (36 percent) and paying off debt (34 percent), such as credit card balances.
About two-thirds of those surveyed who had access to a 401(k) plan said they contribute 10 percent or less of their salaries to the retirement plan, excluding any employer match.
By contrast, earlier studies from T. Rowe Price recommend that investors strive to save at least 15 to 20 percent of their annual income, including any employer contributions, to have a reasonable possibility of living comfortably in retirement.
When asked what percentage of their salaries they would like to save for retirement each year, 42 percent said a number less than the recommended 15 percent. Of equal concern, a little less than one-third (29 percent) of survey respondents were not sure how much they are currently contributing to their retirement plan.
The survey was conducted Aug. 8-20, 2012, among 850 adults ages 21 to 50 who have at least one investment account.
T. Rowe Price is a global investment management organization with $541.7 billion in assets under management as of June 30, 2012.
Originally published on BenefitsPro.com