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401(k) Investors Want More Advice

By JEFF SOMMER
September 22, 2002

By an overwhelming margin, people who participate in 401(k) retirement plans want more investment advice from their employers, according to a recent poll.

The survey, conducted in late July and early August on behalf of Cigna Retirement and Investing Services, found that 89 percent of 401(k) investors wanted their employers to give them "specific information on investment decision-making," Cigna said.

A majority, 55 percent, said their employers could do a better job of responding to questions about retirement planning.

Dissatisfaction with employer-sponsored plans was greatest among younger workers. Only 34 percent of those between 18 and 25 said their employers were giving them "specific investment education and information tailored to their needs." That compares with 39 percent for those 26 to 37, and 47 percent or more for older workers.

While most financial planners would advise younger workers to be relatively aggressive in investing, the survey found that the 18-to-25 group was the most conservative. Only 26 percent said they held stocks or stock mutual funds.

By contrast, 76 percent of baby boomers in the 48-to-56 age group held stocks.

John Y. Kim, president of Cigna Retirement and Investment Services, said, "Younger people often haven't thought very seriously about their retirement plan." In middle age, he said, "you get more serious about it because you realize it really is your nest egg, and if you want it to grow, you need to be in stocks."

The national survey was conducted by KRC Research of Washington and has a margin of error of plus or minus 3 percentage points, according to Cigna.

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