Slowly but surely over the past several decades, the 401(k) retirement plan, which puts the responsibility for building a retirement nest egg on workers, typically without much help from their employers, has supplanted the traditional pension plan to become the most widely used private-sector employer-sponsored retirement plan in the U.S. Today, an estimated 55 million American workers participate in 401(k) plans, with assets totaling $4.6 trillion.
Despite the growing prevalence of 401(k)s in the U.S. workplace, employees apparently aren’t entirely comfortable with the responsibility of amassing and managing their own retirement savings accounts. Indeed, among 401(k) plan participants surveyed in 2016 by the investment firm Charles Schwab, a majority, 56%,said they are either" somewhat confident or “not very confident” about making plan decisions on their own. That lack of confidence explains in part why survey participants named “saving enough for a comfortable retirement” as their top source of financial stress.
With a stronger grasp of how to manage a 401(k) comes relief from some of that financial stress. Here personal finance experts from the Financial Planning Association provide their keys to getting the most out of a 401(k) plan.