T. Rowe Price engaged NMG Consulting to conduct a national study of 3,005 adults aged 21 and older who have never retired and are currently contributing to a 401(k) plan or are eligible to contribute and have a balance of at least $1,000. The online survey was conducted from July 24 to August 14, 2018. This is the fourth in a series of participant surveys, and data from prior surveys is used in this report for comparison purposes.
The first published segment of our research focuses on participants' financial lives...who influences their decisions and how they seek information.
The 401(k) recordkeeper increasingly is playing a central role in a participant's financial life. With more participants than ever seeking help and advice in financial decisions from their 401(k) plan's provider, the recordkeeper is becoming the go-to source for tools and support—not just for retirement planning, but for all the participant’s financial decisions.
- For many employees, the 401(k) recordkeeper is the employee’s preferred source for help and advice—even for financial decisions not related to retirement.
- Most participants want help, and their appetite for it is growing.
- While different generations evaluate and approach advice differently, all generations want it, and all turn first to their 401(k) plan’s recordkeeper.
Three Key Findings That Shouldn't Be Ignored
First Source of Advice: My Plan
For many employees, the 401(k) recordkeeper is the employee’s first source for help and advice—even for financial decisions not related to retirement.
- Three of the top five sources of advice are directly related to the participant’s current 401(k), suggesting that the retirement plan is where participants most commonly turn to first for help
- Participants report the least interaction with third-party “robo-advisors,” which provide financial assistance with little or no human intervention
In 2017 and 2018, we asked 401(k) participants to share information about their financial objectives. We found that the appetite for advice is strong—and growing.
- 94% consider saving for retirement an important financial objective, and over 70% would like some type of advice to help them achieve that objective.
- Financial objectives were cited as major or minor objectives by more than 75% of respondents in 2018
- Between 2017 and 2018, demand for help has increased in all objectives except for "saving for retirement through workplace plans," where demand for advice remained steady at 71%
Advice by Generation
While different generations evaluate and approach advice differently, all generations want it, and all turn first to their 401(k) plan’s recordkeeper.
- 64% of millennials use digital tools and calculators they access on the Internet rather than through their workplace retirement plans “somewhat” or “a great deal” compared with only 24% of baby boomers
- Among the 64% of all workers who turn first to their 401(k) plan, 68% of millennials, 66% of Gen X, and 55% of baby boomers seek out help first through their plan’s provider