Will Your 401(k) Meet Your Retirement Goals?

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: Discover how your 401(k) can align with your retirement goals. Explore safe money alternatives for a secure future. Learn more at SafeMoney.com. It’s no surprise as to why. A 401(k) plan offers a number of benefits, including tax-deferred accumulation, a high contribution limit for pre-tax savings, and in many cases an employer match. As retirement nears for many Americans, it brings up an important question: How will their 401(k) plan prepare them to enjoy a comfortable, meaningful post-work lifestyle? Even with these benefits, some Americans are dissatisfied with their 401(k) because they perceive shortfalls in other areas. Personal perceptions of there being limited investment options, “low” access to personal financial guidance with some plans, and a lack of money control are just a few investor frustrations. There is also the issue of subpar financial knowledge. Surveys indicate many people don’t understand 401(k)s, even though these plans dominate the workplace savings landscape. According to the Investment Company Institute, as of December 31, 2016 Americans held $7 trillion in all employer-based defined-contribution plans. Of this, $4 trillion was in 401(k) plans – or 57.1% of total defined-contribution plan assets. Lack of Financial Literacy Takes Its Toll In some ways, investor frustrations with 401(k)s may be traceable to a lack of knowledge. Take, for instance, the findings of the “Wellness in the Workplace” survey from KRC Research. In the study, 88% of Americans understood topics like employer matching. But in other areas they showed an incredible knowledge gap about their 401(k) plans: About 71% of workers failed a basic quiz on 401(k)s and retirement planning, with workers missing at least three out of nine questions 76% of workers could not define what a mutual fund is 57% of respondents didn’t know what percentage of their salary they had to put away so they could meet their retirement goals 66% of Americans could not name the provider managing their retirement plan Amazingly, nearly 4 out of 5 workers in small-business settings failed to pass the 401(k)/retirement planning quiz In turn, the survey suggests this knowledge gap translates into a lack of financial confidence: 50% of Americans report they don’t receive any one-on-one help fro