PLANADVISER - September/October 2018 - 17

Improvement in Retirement Outlook
Most workers now expect to retire on time
FIFTY-TWO percent of participants
think they will be able to retire at their
ideal retirement age, and the same
percentage somewhat or strongly agree
that their savings will then last through
the rest of their lifetime, according to
the 2018 DC Plan Participant Survey by
J.P. Morgan Asset Management. This
shows a marked improvement from
2012, when 30% expected to retire at
the proper age, and 31% were confident
their savings would last.
The survey also found that 30%
of participants save as much as they
can, and 12% intend to wait until they
retire to figure out how to live on that
savings. Fifty-one percent are willing
to spend time planning but are unsure
how to get started. Only 40% are very
or extremely confident they know how
much to save to achieve their retirement
goals. Thirty-nine percent think
they have estimated how much they
will have saved by retirement; and
only 34% have calculated how much
monthly income their nest egg will
generate.
Seventy-three percent think they
should be saving 10% or more, but,
among this group, 70% have so far
failed to achieve this. Only 34% are very
or extremely confident in their ability
to select investment options, and just
39% can say the same about adjusting
their savings as they approach retirement.
Sixty percent want help with
their investment strategy, including to
leave most of the decisions to experienced
investment professionals, and
40% want to take more of a hands-on
approach as a do-it-yourself investor.
Twenty-five percent
have
not
checked to see if their savings rate is
sufficient; 33% have never changed
their investment selection; 50% have
reviewed their 401(k)
to contribute to the retirement
plan. Fifty-eight percent think their
employer should provide guidance on
how much to save, and 44% think it
should alert them if they are not saving
enough. Only 19% think their employer
should decide how much each participant
should save.
Seventy-nine percent say their
employer offers a match. Forty percent
say their employer should change its
match to a stretch match of 50 cents
on the dollar up to 12%; 27% say
their employer should not change its
match formula but should encourage
employees to save more.
Twenty percent say their employer
should not change the match formula
but send a message to employees who
save only 6% that they should save
more, and 13% say their employer
should do none of the above. Thirty
percent say that their company match
is a contribution recommendation, and
Seventy-nine
percent believe
their employer
should encourage
workers to
contribute to the
retirement plan.
21% say they set their contribution rate
at the company match rate.
Although 25% of sponsors do not
use automatic enrollment due to their
fear of participant pushback, 82% of
participants are either in favor of or
neutral
toward the strategy. Participant
pushback keeps 20% of sponsors
from using automatic escalation.
-Lee Barney
Most Millennials Have
Appropriate Allocations
This is despite having lived through two bear markets.
MOST Millennials-those between the ages of 22 and 37-are appropriately
invested, according to new research by Vanguard. On average, they have 90% of
their portfolio invested in equities, which is consistent with the glide path of the
Vanguard Target Retirement Funds geared for people in that age group.
One-third of Millennials own a target-date fund (TDF), Vanguard found.
" Target-date funds are reshaping the behavior of Millennial and Gen[eration]
in the past six
months; and only 40% have considered
making a change to their 401(k) in the
past six months.
Seventy-nine percent believe their
employer should encourage workers
X investors, with the potential to improve outcomes over an investing lifetime, "
says Jean Young, senior research associate for the Vanguard Center for Investors
Research and author of the paper " Risk-Taking Across Generations. " " Younger
investors are benefiting from balanced, diversified portfolios and shifting away
from extreme equity allocations that we've witnessed in the early years of
previous generations, " she says.
Still, 19% of Millennials have no equities in their portfolio-an increase from
13% in 2012. Before the Great Recession of 2008, only 10% of Millennials had a
zero-equity portfolio. -Lee Barney
planadviser.com September-October 2018 | 17
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PLANADVISER - September/October 2018

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