Data and Research

Participants Not Up to Speed on 401(k) Features

Two-thirds failed Fisher’s 401(k) IQ in the Workplace Quiz.

By Lee Barney editors@assetinternational.com | December 08, 2016

Americans are not up to speed on critical components of 401(k) plans, Fisher Investment 401(k) Solutions found in its 401(k) IQ in the Workplace Quiz. 

Seventy-one percent of respondents failed the quiz, missing three or more of nine questions. While 88% understand matches, 76% do not know what a mutual fund is and 43% don’t know how much of their salary they should save for a comfortable retirement. A full two-thirds (66%) are not confident in selecting investment options, and 24% can’t remember what they selected for their 401(k) investments. Forty percent are not confident they will reach their retirement goals.

Twenty-five percent do not fully trust their 401(k) provider, and 33% ask their family and friends for guidance on how to invest in their 401(k) plan. Only 20% of women make monitoring the progress of their 401(k) plan a regular priority.

“These results point to a larger issue that I see regularly with clients,” says Nathan Fisher, managing director with Fisher Investments 401(k) Solutions. “People tend to understand the big picture value of 401(k) plans, but when you start to get more specific, they quickly struggle, which is a huge problem.” This can result in people investing improperly and not saving enough, Fisher says.

KRC Research conducted the online survey of 1,013 401(k) participants in October for Fisher Investments.