News Feed Item

Newly Released Pentegra Retirement Services / Harris Poll Survey Results Show 65% of Employed Adults with a 401(k) Do Not Believe or Are Not Sure That Their 401(K) Plan Will Provide Enough Money for Them to Retire When They Want To

Pentegra Retirement Services urges people to take better advantage of their 401(k), particularly when it comes to taxes

WHITE PLAINS, N.Y., March 27, 2014 /PRNewswire/ -- Results of a Pentegra Retirement Services survey released today, conducted online by Harris Poll on its behalf in February 2014 among U.S. adults who are employed and enrolled in a 401(k) plan, revealed that 65% of these adults do not believe or are not sure that their 401(k) plan will provide enough money for them to retire when they want/plan to.  Yet, 75% of U.S. employees who are currently enrolled in a 401(k) plan think that 401(k) plans are the most important source of a person's retirement income.

Additional survey findings revealed that 45% of those adults enrolled in a 401(k) plan at their current job are contributing only 6% or less.  However, 42% of U.S. employees enrolled in a 401(k) plan have an understanding that you do not have to pay taxes on contributions made to the plan.

According to Rich Rausser, Senior Vice President of Client Services at Pentegra Retirement Services, "We cannot emphasize enough the importance of putting this money away and taking advantage of a 401(k) plan – not only for retirement, but also to save money on taxes.  Tax deferred contributions through a 401(k) plan lower your reported income, so the more you contribute the less taxable income you have.  It is a win-win. By saving $20 per week on a $400 weekly salary, you are left with $380. After subtracting the 28% federal tax amount, your take-home pay is $274. Put that same $20 into a (taxable) savings account, and your take-home pay drops to $268. That six dollar difference may not seem like much now, but multiply it over 52 weeks for 25 years and you are looking at pocketing an extra $7,800."

The Pentegra survey shows that nearly two thirds – 65% -- of those with 401(k) plans do not believe or are not sure that their 401(k) plan will provide enough money for them to retire when they want/plan to, and Rausser says that this is discouraging news.  "The fact is that you need to try to save enough to provide income replacement of 80% to 90% of your annual pre-retirement income -- for each year in retirement --  in order for you to enjoy a lifestyle similar to the one you have now. "

In addition, the Pentegra survey revealed that three-in-ten (31%) of U.S. employees who are currently enrolled in a 401(k) plan admit they have no understanding of where or how their 401(k) contributions are being invested.  Furthermore, 37% of U.S. employees who are currently enrolled in a 401(k) plan admit that as long their 401(k) funds are there for them when they want them, they are not concerned with how they are invested in the meantime. 

Rausser encourages people to have a greater understanding of the process.  "People really need to have a basic knowledge of how their money is being invested and how the process works.  This is your hard earned money and your future.  Take the time even just annually to sit down with someone in charge of your plan. Ask questions and get answers you understand."

On an encouraging note, 63% of U.S. employees who are currently enrolled in a 401(k) plan have increased their contribution(s) at some point.  Only 19% of U.S. employees who are currently enrolled in a 401(k) plan have never increased their 401(k) contribution(s). 

"Increasing your contribution every year is the key to retirement planning success," adds Rausser.  "Each time you get a raise, increase your contribution by at least 1% annually—but even better, 2%.  A simple way to do this is to add an auto escalation feature to your plan, so that contributions are increased automatically on an annual basis—put savings on auto-pilot so that participants don't have to think about it."  

Other highlights of the Pentegra survey include:

  • On average, the last time U.S. employees who are currently enrolled in a 401(k) plan increased their contribution was 2.4 years ago.
  • For those with total household income (HHI) of $50k-$74.9k, they most recently increased their contributions on average 2.6 years ago.  Those with HHI of $100k or more, on average, increased their contribution most recently 2.5 years ago.  Both are significantly longer ago than the average of 1.2 years when those with HHI of less than $50k most recently increased their contributions.
  • Respondents who contribute mowwre than 10% of their salary to their 401(k) plan most recently increased their contribution on average 3.3 years ago, significantly longer than the average of 2.1 years ago that those who contribute 10% or less of their salary say they increased their contributions.
  • Over two-thirds (68%) of U.S. employees who are currently enrolled in a 401(k) plan do not expect to use their 401(k) until they are required to take the mandatory minimum distribution (at age 70 ½).
  • Nearly two-in-five (37%) of U.S. employees who are currently enrolled in a 401(k) plan admit that as long their 401(k) funds are there for them when they want them, they're not really concerned with how they are invested in the meantime.
  • About one-third (32%) of U.S. employees who are currently enrolled in a 401(k) plan believe that starting a 401(k) later in life with larger contributions will yield the same results as if you had started at a younger age with smaller contributions.

Survey Methodology
This survey was conducted online within the United States by Harris Poll on behalf of Pentegra Retirement Services from February 10-12, 2014 among 2,059 U.S. adults ages 18 and older, among whom 446 are employed full-time/part-time and are currently enrolled in a 401(k) plan. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.   For complete survey methodology, including weighting variables, visit http://www.pentegra.com/announcements/HarrisInteractiveQuickQuery.pdf

About Pentegra
Pentegra Retirement Services is a leading provider of retirement plan solutions to organizations nationwide. Founded by the Federal Home Loan Bank System in 1943, Pentegra offers a full range of retirement programs, including 401(k) plans, Defined Benefit Pension plans, Cash Balance plans, 412(e)(3) Fully Insured Defined Benefit plans, Split Funded Defined Benefit plans, KSOPs, ESOPs, Profit Sharing plans, Age-Weighted plans, New Comparability plans, 457(b) and 457(f) plans, 403(b) plans, 401(a) plans, Section 79 plans, Non-qualified Executive Benefit and Director plans, benefits financing solutions using BOLI and a broad array of TPA services. For more information, go to www.pentegra.com

Media Contact: 
Rodi Rosensweig
[email protected]

SOURCE Pentegra Retirement Services

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...
Although it has gained significant traction in the consumer space, IoT is still in the early stages of adoption in enterprises environments. However, many companies are working on initiatives like Industry 4.0 that includes IoT as one of the key disruptive technologies expected to reshape businesses of tomorrow. The key challenges will be availability, robustness and reliability of networks that connect devices in a business environment. Software Defined Wide Area Network (SD-WAN) is expected to...
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
OnProcess Technology has announced it will be a featured speaker at @ThingsExpo, taking place November 1 - 3, 2016, in Santa Clara, California. Dan Gettens, OnProcess’ Chief Analytics Officer, will discuss how Internet of Things (IoT) data can be leveraged to predict product failures, improve uptime and slash costly inventory stock. @ThingsExpo is an annual gathering of IoT and cloud developers, practitioners and thought-leaders who exchange ideas and insights on topics ranging from Big Data in...
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of (at least) three separate application components: the software embedded in the device, the back-end service, and the mobile application for the end user’s controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target –...
Virgil consists of an open-source encryption library, which implements Cryptographic Message Syntax (CMS) and Elliptic Curve Integrated Encryption Scheme (ECIES) (including RSA schema), a Key Management API, and a cloud-based Key Management Service (Virgil Keys). The Virgil Keys Service consists of a public key service and a private key escrow service. 

SYS-CON Events announced today that CDS Global Cloud, an Infrastructure as a Service provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. CDS Global Cloud is an IaaS (Infrastructure as a Service) provider specializing in solutions for e-commerce, internet gaming, online education and other internet applications. With a growing number of data centers and network points around the world, ...
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will present at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said “No to LUNs.” With Tintri they manag...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
From wearable activity trackers to fantasy e-sports, data and technology are transforming the way athletes train for the game and fans engage with their teams. In his session at @ThingsExpo, will present key data findings from leading sports organizations San Francisco 49ers, Orlando Magic NBA team. By utilizing data analytics these sports orgs have recognized new revenue streams, doubled its fan base and streamlined costs at its stadiums. John Paul is the CEO and Founder of VenueNext. Prior ...
SYS-CON Events announced today that eCube Systems, the leading provider of modern development tools and best practices for Continuous Integration on OpenVMS, will exhibit at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. eCube Systems offers a family of middleware products and development tools that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect...
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...