Despite well-publicized warnings about how to save for retirement, two studies indicate that workers and employers are shockingly overconfident and ill informed about basic matters of retirement saving.
A Nationwide Financial poll finds that, while 80% of small business owners claim to be confident about meeting their retirement plan responsibilities, most cannot answer basic questions about said responsibilities.
For instance, many do not realize that they hold primary fiduciary responsibility, believing their plan investment providers, financial advisers and even their employees have this role. More than 60% say they do not have a formal process with which to regularly evaluate their investment selections, and more than a third think it is acceptable for a plan provider to require that its investment funds be among a plans investment options.
"Retirement plan education is a major and immediate need among small business owners that financial advisers can help fulfill," said Michael Butler, senior vice president of Nationwide division NFS Distributors. "It can be a good way for financial advisers to demonstrate their expertise and service capabilities to prospects or clients."
A separate survey of 1,000 Americans by the financial professional association Million Dollar Round Table found that while three-quarters of respondents said they feel comfortable with their retirement knowledge, 35% do not even contribute to a retirement vehicle such as a 401(k) or an IRA.