The biggest obstacle facing employees as they prepare for retirement is not being able to save enough, according to a new survey from Brookfield-based Francis Investment Counsel LLC.
The survey, conducted from June 2013 to September 2014, encompassed 1,400 Wisconsin workers from a variety of industries including health care, manufacturing and professional/technical. The survey was distributed to the company’s retirement plan participants who attended one of its group education workshops.
About 40 percent of respondents said their biggest obstacle in retirement preparation was “not being able to save enough,” while another 29 percent listed “health care costs” as the biggest obstacle. About 13 percent said “losing money in the market” was the biggest obstacle, while 11 percent responded “social security disappearing” and 6 percent said “insecure future at my job.”
Despite new U.S. Department of Labor fee disclosure rules that went into effect in 2012, most participants still don’t understand the fees they pay on 401(k) accounts, according to Francis Investment Counsel. About 48 percent of respondents said they “have received information in the past but don’t really understand the fees.” And a quarter of those surveyed said they “haven’t got a clue” what the fees are. Another 21 percent said they “have a good grasp of what I pay to participate” and 6 percent said “it doesn’t really matter to me.”
Respondents overwhelmingly (66 percent) favored one-on-one advice sessions to receive retirement planning and investment help. About 21 percent of those surveyed said they prefer educational seminars in the workplace, while 7 percent favored online tools, 3 percent liked asking family and friends and 3 percent use personal finance sources like magazines and television programs.
Among those surveyed, 81 percent preferred a financial advisor learn about their situation and help them decide what to do when making investment decisions for their retirement account. Another 11 percent preferred the advisor to do the investing for them, and 7 percent wanted to do it on their own.
As far as the advisor, 57 percent said they would pay more if it meant the advisor guaranteed objectivity, while 24 percent said an advisor that offers low cost services with potential conflicts of interest would be fine. And 19 percent said it didn’t matter to them.
