Part 1: Understand the state of the participantContributors Catherine Peterson, Anne Lester
PARTICIPANTS SEE A BRIGHTER FUTURE, BUT …
Viewed through the participant lens, the retirement outlook has improved—roughly half of participants feel they will be able to retire when they want, with savings to last throughout their retirement years—up from about 30% in 2012 (EXHIBIT 1).
Our retirement research and industry experience lead us to believe that the efforts of plan sponsors, regulators and other partners to evolve and strengthen defined contribution (DC) plans are paying off. But it is not yet time for a victory lap. The bull market rise of more than 100% in the S&P 500 from 2012 through 2017 can’t be ignored in interpreting our survey results. And, with almost half of participants still uncertain about their retirement prospects, there is clearly more work to be done.
This first article in our series on 2018 DC Plan Participant Survey Findings, assesses the state of participants—their knowledge, behavior and attitudes with respect to planning, saving and investing for retirement. Parts 2 and 3 discuss participants’ perspectives on the strategies plan sponsors are using to motivate saving and streamline investment decision-making. We will continue to monitor these trends across changing market environments.
The retirement outlook has improved … but further progress is needed
EXHIBIT 1: PERCENTAGE OF PARTICIPANTS WHO EXPECT TO BE FINANCIALLY ABLE TO RETIRE AT THEIR IDEAL RETIREMENT AGE, AND PERCENTAGE WHO “SOMEWHAT” OR “STRONGLY” AGREE THEIR SAVINGS WILL LAST THROUGHOUT THEIR LIFETIME
1J.P. Morgan Plan Sponsor Research 2015, 2017.
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