BALTIMORE, June 24, 2020 /PRNewswire/ -- A recent
survey conducted by T. Rowe Price
found that over 83% of 401(k) participants expressed interest in
keeping their savings in their employer plan upon retirement. Of
the 83%, 30% of participants said they currently have plans to keep
their savings with their employer, and 53% said they would consider
keeping their saving in their employer plan if it offered solutions
to help generate income. The survey, which focused on financial
attitudes and behaviors, found that the preference to keep assets
in plan is true across all generations, the strongest with
millennials at 88%, followed by Generation X (83%), and baby
boomers (77%).
Meanwhile, 61% of participants say their employers have not
communicated the advantages of leaving the money in the plan and
many are confused or unaware of their options:
- Eight in 10 participants have a goal to manage a plan that
converts their assets into an income stream in retirement, but when
asked what type of retirement income products they would use to do
so, they are unsure.
- One in four participants were not sure if they should invest in
a managed payout, an immediate annuity, deferred annuity, or if
they should manage their money on their own.
"Creating more awareness around retirement income products and
strategies has become increasingly critical as more and more
defined contribution savers approach retirement, and especially in
recent months, while many individuals faced financial hardships
caused by the global pandemic, " said Kevin
Collins, head of retirement plan services at T. Rowe Price. "When it comes to retirement income,
there is no simple, one-size-fits-all solution -- and determining
the appropriate strategy can be a complicated task for many
individuals, educating participants on the types of products that
are available as well as providing them with tools and support can
help them make informed choices that best fit their specific needs
and preferences."
Editor's Note: T. Rowe Price
conducted a separate body of research in 2018 focused on plan
sponsors and found that the majority of employers prioritize
keeping retiring participants in-plan. The white paper addressing
this research can be found here.
ABOUT THE STUDY
The findings are based on a national
study of 3,016 retirement plan participants, 250 eligible non-plan
participants, and 603 individuals without access to workplace
savings plans. T. Rowe Price worked
with NMG Consulting to conduct the survey online from June 13, 2019 to June 25,
2019. This is the fifth edition of the study, following the
2014, 2015, 2017, and 2018 installments. The first phase of the
2018 study focused on financial advice, the second phase focused on
retirees, and the third phase focused on gender. The first phase of
the 2019 study can be found here. Data from prior studies is used
in this report for comparison purposes.
For more information about the study please contact Sudipto Banerjee at
Sudipto.Banerjee@troweprice.com or 410-577-5758 or 443-
204-0662 (c).
ABOUT T. ROWE PRICE
Founded in 1937, T. Rowe Price
(NASDAQ-GS: TROW) is an independent global asset management company
with $1.19 trillion in assets under
management as of May 31, 2020. The
organization is focused on delivering investment excellence and
retirement services for institutional and individual investors. Our
strategic investing approach, driven by independent thinking and
guided by rigorous research, helps clients feel confident in
pursuing financial goals. T. Rowe Price Retirement Plan Services
has been leading retirement solutions provider for more than 30
years, serving 2.2 million retirement plan participants.
troweprice.com, Twitter, YouTube,
LinkedIn, Instagram, or Facebook.
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SOURCE T. Rowe Price Group, Inc.