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Group study examines 401(k) plans and why people participate

07/21/11

A Boston Research Group of 1,000 retired and current 401(k) participants sponsored by Fidelity Investments shows what motivates people to participate in 401(k) plans.

The overwhelming majority of the studied group, 92 percent, stated that their employer contribution to their 401(k) programs is the main driving factor for participating in the program. Ninety percent also reported that the tax deferral provided by the retirement account was an influential factor.

Despite 53 percent of the group stating that they were able to raise their 401(k) contribution amounts in the last five years, many don't think that they are saving enough for their retirement. Fifty-four percent said that they would like to be able to contribute more to their 401(k) plans.

A significant percentage of the group doesn't believe that their 401(k) alone will be sufficient to adequately provide for them during their retirement. Thirty-seven percent are also saving in an IRA, 33 percent are enrolled in employer-sponsored pension plans, 28 percent are saving for retirement in bank accounts and another 28 percent are investing in stocks and bonds. Nineteen percent of the surveyed group has no additional retirement savings plans besides their 401(k).

For those looking over their options for retirement planning, immediate, deferred, variable and fixed annuities are all also good options to consider.

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