Nearly 80% of Plan Participants Worry About
Securing Lifetime Retirement Income
NEW
YORK, July 24, 2024 /PRNewswire/ -- J.P. Morgan
Asset Management today released its 2024 Defined Contribution
(DC) Plan Participant Survey, shedding light on the dynamic
changes in retirement savings and the evolving expectations of plan
participants. The survey reveals a notable shift, with participants
increasingly seeking robust retirement income support and enhanced
resources for financial wellness and education. This year's report
also explores generational differences, revealing distinct
preferences and behaviors across Baby Boomers, Generation X,
Millennials, and Generation Z, while also highlighting the
synergies between participant responses and sponsor views. Each
year, the survey looks to gain a deeper understanding of how
participants are thinking about their retirement plans and their
overall financial pictures.
"While it's no surprise that participants seek retirement income
support, it's particularly noteworthy that guaranteed income
options are highly attractive and can even motivate increased
savings," said Alexandra Nobile, Retirement Strategist at
J.P. Morgan Asset Management. "Retirement plans continue
to be a top priority for employees when evaluating employer
benefits. It's encouraging to see that SECURE 2.0 provisions,
including emergency savings and student loan matching, are
resonating strongly with plan participants."
The results from the this year's DC Plan Participant
Survey of 1,503 participants explored views in four main
areas: general savings and employer-sponsored benefits, advice,
plan design and retirement income.
1. Broadening the savings scope:
- Nine in 10 found financial wellness programs to be valuable,
while 39% lack basic emergency savings, up from 27% in 2021.
- The majority of participants found key SECURE 2.0 provisions,
such as employer-sponsored emergency savings and student loan
matching, to be appealing (69% and 66%, respectively).
- Plan sponsor implications: Consider offering employees
financial wellness support, like emergency savings, student loan
debt matching, and financial education.
2. The need for professional guidance:
- Three out of four participants express a desire for
professional advice on investment decisions, yet only half
currently receive such guidance.
- Six out of 10 participants wish for an easy button where they
can completely hand over retirement planning and investing to a
professional.
- Plan sponsor implications: educate participants about the value
of professional guidance and offer it to plan participants.
3. The power of proactive plan design:
- 63% of participants acknowledge they are not saving enough for
a financially secure retirement.
- High favorability towards automatic enrollment and contribution
escalation, with nearly nine out of 10 participants supporting
these features.
- Strong interest in target date funds, with 89% of participants
finding them appealing.
- Plan sponsor implications: utilize automatic features to
increase participation and contribution rates and given the strong
interest, consider defaulting into target date funds.
4. Insights into retirement income:
- The average expected retirement age is 65, though industry
research indicates that many may retire earlier due to unforeseen
circumstances.
- 77% of participants are concerned about creating a steady
retirement income stream, yet less than half have calculated their
savings needs.
- Nine in 10 express interest for in-plan solutions that provide
guaranteed income in retirement. Guaranteed income was also a top
motivator for participants to contribute more to their retirement
plans.
- Plan sponsor implications: explore retirement income offerings
and consider offering in plan.
"The DC Plan Participant Survey highlights the critical need for
proactive plan design, professional guidance, and innovative
retirement income solutions," said Alyson Frost, Head of Retirement Insights at
J.P. Morgan Asset Management. "As participants face a volatile
economic landscape, these insights are invaluable for plan sponsors
and financial professionals aiming to enhance participant
experiences and achieve stronger retirement outcomes," said
Frost.
For more information about the survey findings, please visit the
DC Plan Participant Survey dedicated website.
Methodology
In January 2024, we partnered with
Greenwald Research, a market research firm based in Washington, D.C., to conduct an online survey
of 1,503 DC plan participants. To qualify for the study, each
respondent had to be employed full-time at a for-profit
organization with at least 50 employees, be at least 18 years old
and have contributed to a 401(k) plan in the past 12 months.
Survey results have been weighted by age, gender and household
income to reflect the overall makeup of the general population of
401(k) plan participants. In a similarly sized, random sample
survey of general population respondents, the margin of error (at
the 95% confidence level) for the total population in this study
would be plus or minus approximately 2.8 percentage points.
About J.P. Morgan Asset Management
J.P. Morgan Asset Management, with assets under management of
$3.3 trillion, as of June 30, 2024, is a global leader in investment
management. J.P. Morgan Asset Management's clients include
institutions, retail investors and high net worth individuals in
every major market throughout the world. J.P. Morgan Asset
Management offers global investment management in equities, fixed
income, real estate, hedge funds, private equity and liquidity. For
more information: www.jpmorganassetmanagement.com. J.P. Morgan
Asset Management is the marketing name for the asset management
businesses of JPMorgan Chase & Co., and its affiliates
worldwide.
JPMorgan Chase & Co. (NYSE: JPM) is a leading financial
services firm based in the United States
of America ("U.S."), with operations worldwide. JPMorgan
Chase had $4.1 trillion in assets and
$341 billion in stockholders' equity
as of June 30, 2024. The Firm is a
leader in investment banking, financial services for consumers and
small businesses, commercial banking, financial transaction
processing and asset management. Under the J.P. Morgan and Chase
brands, the Firm serves millions of customers in the U.S., and many
of the world's most prominent corporate, institutional and
government clients globally. Information about JPMorgan Chase &
Co. is available at www.jpmorganchase.com.
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SOURCE J.P. Morgan Asset Management