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December 11, 2017 - Kansas City, Mo.
Some nine out of 10 plan participants feel at least some regret about saving for their future, according to a national survey conducted by American Century Investments.
The fifth annual study, containing responses from 1,500 full-time workers (grouped by ages 55-65 and 25-54) who currently participate in their employer's retirement plan, looked at their thoughts and perspectives on retirement savings. The survey focused on employee regrets about saving, the value they place on their retirement plans and their reliance on employers' influence and guidance, according to American Century Investments Vice President, Client Marketing Diane Gallagher.
"Not saving for retirement was cited as the most common personal regret—more than not being a better person or having better personal relationships," Gallagher said. "People recognize the importance of saving but lack that general direction or push to get started."
Key study findings include:
Pre-retirees (age 55 to 65) who report having a great deal of regret has risen five percent in the past two years, according to the survey.
Other survey learnings include:
"We continue to see this disconnect in people knowing what they 'should do' against what they actually do with respect to saving. Although participants recognize that responsibility and gravity, they still struggle with overcoming inertia to move forward," Gallagher said.
The influence of employers on participants saving for retirement cannot be overstated, according to the study:
"The idea that employees would accept a higher match over higher salary may have implications for plan sponsors and their consultants in structuring compensation and benefit programs," Gallagher said. "It is certainly a perspective that is worth examining within a particular organization."
Automatic plan features are increasingly important to participants, according to the research.
"Participants are really looking to employers to establish defaults around saving rates and investments to help them get started," Gallagher said.
The survey was conducted during the third quarter of 2017 among a total of 1,500 full-time workers between ages 25 and 65, participating in their employer's retirement plan, intending to retire at some point, and not working for the government. The data were weighted to reflect the makeup of key demographics (gender, income and education) among all American private sector plan participants between the ages of 25 and 65 (according to estimates from the 2012 U.S. Consumer Population Survey). Data collection and analysis were completed by Mathew Greenwald and Associates of Washington, D.C.
American Century Investments is a leading privately held investment management firm, committed to delivering superior investment performance and building long-term client relationships since its founding in 1958. Serving investment professionals, institutions, corporations and individual investors, American Century Investments offers a variety of actively managed investment disciplines through an array of products including mutual funds, institutional separate accounts, commingled trusts and sub-advisory accounts. The company's 1,300 employees serve clients from offices in New York; London; Hong Kong; Mountain View, Calif.; and Kansas City, Mo. Jonathan S. Thomas is president and chief executive officer, and Victor Zhang and David MacEwen serve as co-chief investment officers. Delivering investment results to clients enables American Century Investments to distribute over 40 percent of its dividends to the Stowers Institute for Medical Research, a 500-person, non-profit basic biomedical research organization. The Institute is the primary owner of American Century Investments and has received dividend payments totaling over $1.2 billion since 2000. For more information about American Century Investments, visit www.americancentury.com.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
American Century Investment Services, Inc., Distributor