J.P. Morgan Asset Management today released its 2024 Defined Contribution (DC) Plan Participant Survey, shedding light on the dynamic changes in retirement savings and the evolving expectations of plan participants. The survey reveals a notable shift, with participants increasingly seeking robust retirement income support and enhanced resources for financial wellness and education. This year's report also explores generational differences, revealing distinct preferences and behaviors across Baby Boomers, Generation X, Millennials, and Generation Z, while also highlighting the synergies between participant responses and sponsor views. Each year, the survey looks to gain a deeper understanding of how participants are thinking about their retirement plans and their overall financial pictures.

"While it's no surprise that participants seek retirement income support, it's particularly noteworthy that guaranteed income options are highly attractive and can even motivate increased savings," said Alexandra Nobile, Retirement Strategist at J.P. Morgan Asset Management. "Retirement plans continue to be a top priority for employees when evaluating employer benefits. It's encouraging to see that SECURE 2.0 provisions, including emergency savings and student loan matching, are resonating strongly with plan participants."

The results from the this year's DC Plan Participant Survey of 1,503 participants explored views in four main areas: general savings and employer-sponsored benefits, advice, plan design and retirement income.

1. Broadening the savings scope:

• Nine in 10 found financial wellness programs to be valuable, while 39% lack basic emergency savings, up from 27% in 2021.

• The majority of participants found key SECURE 2.0 provisions, such as employer-sponsored emergency savings and student loan matching, to be appealing (69% and 66%, respectively).

• Plan sponsor implications: Consider offering employees financial wellness support, like emergency savings, student loan debt matching, and financial education.

2. The need for professional guidance:

• Three out of four participants express a desire for professional advice on investment decisions, yet only half currently receive such guidance.

• Six out of 10 participants wish for an easy button where they can completely hand over retirement planning and investing to a professional.

• Plan sponsor implications: educate participants about the value of professional guidance and offer it to plan participants.

3. The power of proactive plan design:

• 63% of participants acknowledge they are not saving enough for a financially secure retirement.

• High favorability towards automatic enrollment and contribution escalation, with nearly nine out of 10 participants supporting these features.

• Strong interest in target date funds, with 89% of participants finding them appealing.

• Plan sponsor implications: utilize automatic features to increase participation and contribution rates and given the strong interest, consider defaulting into target date funds.

4. Insights into retirement income:

• The average expected retirement age is 65, though industry research indicates that many may retire earlier due to unforeseen circumstances.

• 77% of participants are concerned about creating a steady retirement income stream, yet less than half have calculated their savings needs.

• Nine in 10 express interest for in-plan solutions that provide guaranteed income in retirement. Guaranteed income was also a top motivator for participants to contribute more to their retirement plans.

• Plan sponsor implications: explore retirement income offerings and consider offering in plan.

"The DC Plan Participant Survey highlights the critical need for proactive plan design, professional guidance, and innovative retirement income solutions," said Alyson Frost, Head of Retirement Insights at J.P. Morgan Asset Management. "As participants face a volatile economic landscape, these insights are invaluable for plan sponsors and financial professionals aiming to enhance participant experiences and achieve stronger retirement outcomes," said Frost.

For more information about the survey findings, please visit the DC Plan Participant Survey dedicated website.

Methodology

In January 2024, we partnered with Greenwald Research, a market research firm based in Washington, D.C., to conduct an online survey of 1,503 DC plan participants. To qualify for the study, each respondent had to be employed full-time at a for-profit organization with at least 50 employees, be at least 18 years old and have contributed to a 401(k) plan in the past 12 months.

Survey results have been weighted by age, gender and household income to reflect the overall makeup of the general population of 401(k) plan participants. In a similarly sized, random sample survey of general population respondents, the margin of error (at the 95% confidence level) for the total population in this study would be plus or minus approximately 2.8 percentage points.