CFP Board Research Shows One-Third of Americans Don’t Know about Employer Retirement Plan Options
In May 2019, the stock market was still in the midst of its record-breaking bull run and the American economy was at the peak of its strongest and most sustained performance in decades. Despite this top-line economic growth, research conducted by CFP Board around the same time found that only one in four Americans felt financially prepared for retirement. The research, which was done in collaboration with global research firm Morning Consult, was released by CFP Board on May 8, 2019.
Employer retirement options knowledge gap
According to the research, nearly eight in ten (79 percent) also do not feel reassured that they have the best retirement savings strategies available to them – perhaps because consumers don’t know what their options are. Three in ten do not know if their current employer offers a retirement savings plan and one in five say saving for retirement is too complicated.
The CFP Board conducted this survey as part of a new effort to identify challenges to the current retirement system and develop recommendations for policymakers to improve it. As part of this broader effort, CFP Board commissioned Fred Reish, an internationally known expert in retirement issues and partner at Drinker Biddle, to create a report to be published in 2020. The report will be informed by a Retirement Issues Working Group, which is a blue-ribbon panel of CFP® professionals providing on-the-ground, practical experiences with retirement security issues.
In a press release announcing the survey, Kevin Keller, CFP Board CEO said, “With so many Americans getting a late start on retirement savings, the odds are high that they will be unprepared to maintain the lifestyle they’re accustomed to living. Americans know how important it is to save for retirement, but the truth is more than a third of those surveyed are overwhelmed by the process and, critically, many do not understand what products and resources are available to them.”
Despite these statistics, 60 percent of Americans who report receiving retirement advice from a financial professional say they have “definitely” benefitted from this service. Additionally, more than half (54 percent) of Americans believe they would benefit from receiving retirement savings advice from a financial professional, if they decided to use one in the future.
"This survey shows there is still a lack of clarity about what options are available to retirement savers, including ethical and competent financial advice."
— CFP Board ceo kevin Keller, cae
Importance of saving for retirement
The survey also showed that nearly half of Americans (49 percent) think adults should start saving for retirement in their 20s, but few follow their own advice. More than one in four (26 percent) delay saving for retirement until their 30s, while another 15 percent wait until their 40s. Most alarming, approximately one in ten Americans (eight percent) wait to start saving for retirement until after 50 years of age.
“The nuances to retirement savings vary based on circumstantial factors, such as what you can afford to save and what savings programs are available to you,” Keller said. “This survey shows there is still a lack of clarity about what options are available to retirement savers, including ethical and competent financial advice. It’s time for Congress, the Administration and other stakeholders, including CFP Board, to come together to develop new solutions to meet the retirement crisis that we will inevitably face.”