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401k Saving Stress on the Rise

A recent survey conducted by Schwab finds that 401k savings goals and stress levels are on the rise. Participants in the survey now believe they need to save $1.9 million to be prepared for retirement.

The survey of 401k plan participants finds that saving enough for a comfortable retirement continues to be their leading source of significant financial stress. On average, these 401k participants believe they need to save $1.9 million for retirement, an increase of 12% from the $1.7 million reported in last year’s survey. Two in five participants, or 41%, also say they made a change to their 401k account due to COVID-19, citing rebalancing and increasing contribution rates as the most common changes. The top action steps taken by these individuals were a combination of defensive and potentially opportunistic moves. Of the 41% who acted, 14% rebalanced their portfolio and 12% increased their contribution rate. These individuals also indicated that they either increased (8%) or decreased (7%) their exposure to stock funds/equity.

Notably, there was a higher rate of action among the one in four (25%) of survey respondents who consulted a financial professional. Of those who sought guidance, 67% made changes in their 401k. The top three actions steps were the same as the broader group but at a higher rate: rebalancing (26%), increasing the contribution rate (22%) and increasing exposure to stock funds/equity (17%).

Survey respondents anticipate COVID-19 will have an impact on their retirement savings. Thirty-seven percent feel they are ‘very likely’ to achieve their retirement savings goals, nearly half (49%) report they are ‘somewhat likely’ to achieve their retirement savings goals and 14% say it is ‘not likely’ that they will achieve their goals. One in five (21%) expect to retire later than originally planned because of the current situation.

If you have questions regarding your 401k contributions, rebalancing or your exposure to stock funds/equity, please reach out to our team by calling 678-905-4450 or scheduling an appointment online at wiserinvestor.com.

Posted 8/13/2020

Wiser Wealth Management, Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

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