Don’t Let Confusion Ruin Your Retirement Chances

Seventy percent of Americans say their 401k plans are in better shape now than ever before, but that they are not confident in their financial management abilities. More than half believe explanations on their 401k investments are more confusing than their health care benefits, while 46 percent don’t feel like they know their best investment options.

The survey is a reminder of the importance of proper retirement planning. If you don’t understand your 401k plan investment options, “You’re jeopardizing the likelihood that you’ll achieve your long-term financial goals,” Scott Holsopple, president of Smart401k, explained in an email statement. “Maybe you’re aggressively seeking maximum returns or maybe you’re conservatively looking to preserve your nest egg. Either way, you could find yourself invested in funds that are completely inappropriate for your situation and goals, without even knowing it.”

Placing money aside for retirement is already difficult for many Americans, but 57 percent also wish there were an easier way to figure out how to choose the right 401k investments. Thirty-four percent stress over correctly allocating their 401k dollars.

On the positive side, many 401k plans offer some type of professional advice. When participants receive help, they often feel more confident. In fact, 61 percent of workers felt confident about their investment choices with the help of a financial professional, compared to only 32 percent of participants without any assistance.