Despite justifiable anger with Washington and Wall Street, Americans like what they've got in their 401(k). In a recent survey from the Investment Company Institute, a majority of households indicated they are confident that retirement plan accounts can help people reach their retirement goals. Among households that participate in defined contribution plans or own IRAs, 78 percent expressed confidence in these plans. Even larger majorities supported key features of the 401(k) system, including tax advantages for employee and employer savings, payroll deduction, and individual choice and control.
Other new findings from the household opinion survey conducted include:
- Americans like the 401(k) system. Among households expressing an opinion about retirement plans, 90 percent had a favorable opinion. Support was strong even among households with no DC plan or IRA; in this group, 85 percent of those with an opinion said they had a favorable impression of these accounts.
- Households value the discipline and investment opportunity that 401(k) plans present. Most households with DC accounts agreed that these plans helped them think about the long term and made it easier for them to save.
- Savers want choice and control. Among DC account-owning households, 98 percent said it is important to them to have choice in and control of their retirement plan investments.
- DC account holders like their plan investment options. Overall, 85 percent of DC account-owning households agreed that their plans offer a good lineup of investment options.
- Retirees do not want mandates related to account draw down in retirement. Survey respondents overwhelmingly believe retirees should be able to make their own decisions about how to manage their assets in retirement, with 70 percent opposed to the concept of a mandated annuity or government payout.
Of course, the system can always be improved. ICI has advocated for improving disclosure about all investment options in 401(k)s; enhancing understanding of target date funds; making it easier for small employers to offer plans; providing workers in jobs that do not offer plans access to payroll deductions to save in an IRA; providing financial and investor education to all Americans; putting Social Security on sound financial footing; relaxing required minimum distribution rules; and removing obstacles to allow employers to diversify participants out of concentrations of company stock.
