People who get professional advice about their 401(k)s save more and have a better chance of meeting their goals. Yet few people seek out that help, according to a study released last week.
For instance, 74 percent of people who had professional help knew how much money they should have stashed in their 401(k) plans by the time they stop working, according to the study by Natixis Global Asset Management. That compared with about half, or 54 percent, of people who don’t work with a financial adviser.
‘‘If, at a minimum, you don’t know how much you’re going to need on the day you’re going to retire,’’ said Ed Farrington, executive vice president for retirement and business development for Natixis, ‘‘then the risk is you’ll fall short of the lifestyle you’re hoping for.’’
People working with financial advisers also contributed more, about 9.5 percent of their income on average, compared with 8.6 percent for all workers, according to the firm. People without advisers contributed 7.8 percent of their pay.
Financial professionals aside, most workers surveyed were also ignoring the free tools made available to them: 64 percent of savers said their plans offer a retirement income calculator, but only 38 percent used it. Similarly, 59 percent of participants had access to tools that could help them figure out how much income their current savings would provide once they were in retirement, but only 37 percent used them.
What the numbers show, Farrington said, is that most people understand the value of their 401(k) plans — 84 percent said they expected their 401(k) to be their most important source of income later in life — but few take the time to make sure they’re getting as much as they can out of the accounts.
A separate study released recently by Charles Schwab found that people spend twice as much time shopping for a new car or planning a vacation as they do researching their 401(k) options. And even when they have the option of getting help with those decisions, they rarely take advantage of it — despite 70 percent of them saying they would feel more confident about their decisions if they could get financial help.
In addition to saving more, people who get advice with their 401(k)s are also more diversified, said Steve Anderson, head of Schwab Retirement Plan Services. They are also more likely to stay the course and avoid portfolio changes when markets are volatile, he said.
So what would it take for people to ask for help? Not surprisingly, the biggest life change — by far — that pushed them to think seriously about saving was getting close to retirement.
Sixty-three percent of people said that event was most likely to encourage them to seek help with their planning.