May 8, 2012 at 1:48 PM ET
Most of you just don’t want to be bothered by your 401(k) plans even though you’ve signed up for them.
Although employers have been giving employees lots of paper work on these plans, providing education about them, and in many cases matching what workers put in, most workers aren’t taking full advantage of 401(k)s at work, according to two studies released this week by Schwab Retirement Plans Services.
About 54 percent of workers aren’t getting the most out of their employer-sponsored retirement investments, found one study by CFO Research Services, commissioned by Schwab, which surveyed 200 senior finance and human resources executives at large and mid-sized companies.
What’s driving the 401(k) apathy?
“Retirement planning is off in future, therefore it doesn’t get the time or attention it needs,” said Dave Gray, vice president of 401(k) client experience at Charles Schwab.
Many employees feel too busy and too financially ignorant to manage 401(k)s, found the other Schwab study, conducted by Koski Research. The study polled more than 1,000 workers enrolled in such plans nationally and found:
"It's not a good idea to neglect your 401(k) but you don't want to micromanage it either," advised Greg McBride, senior financial analyst for Bankrate.com.
"The 401(k) is the primary vehicle for retirement savings for a majority of people working today," he explained. "This is long-term savings and it does pay to regularly revisit the account for purposes of rebalancing investments and making sure your investment strategy is still consistent with your goals and time horizon."
To combat the investing indifference, employers plan to boost their outreach to workers, including everything from printed materials to workshops, the CFO study found.
Clearly, not paying attention could do you future financial harm. Nearly one third of those surveyed said they didn’t even know about the fees they’re being charged in association with their plans.
You might think it’s better just to pull the plug on your 401(k) because you’re not getting the most out of it, or you could end up making poor investment choices, but Gray warned against that.
“I think any savings is better than no savings,” he maintained.
So, are you managing your 401(k), or is it on autopilot?