Plan participants have a different level of concern about investments based on their account balances.
It might seem to make sense that people who work hard to fund a retirement account would be risk-averse.
Such is proven in the Spectrem Defined Contribution Market Insights report Financial Attitudes and Concerns of Retirement Plan Participants.
The report asks DC plan participants many questions regarding their thoughts regarding investing and financial advisors, among them being the factors important to them in selecting investments. Tops among them is “the level of risk associated with investments”, which 86 percent of plan participants consider to be a significant factor.
That was most true among plan participants with the highest balances. Among those with a balance of over $100,000, 94 percent said risk was a significant factor in their investments.
Eighty-four percent of defined contribution plan participants said the diversity of investments mattered to them. That was especially true of men and investors 65 years of age and older.
The next most popular investment factor was the reputation of companies investing in, which was selected by 78 percent of participants. However, the youngest plan participants, those under the age of 36, were less concerned with that (only 67 percent selected that choice).
Of almost equal concern, selected by approximately 75 percent of participants, was the tax implications of investments, and the past track record of the companies being invested in? The tax implications were of greatest concern to the older group, over 50, which perhaps are concerned about how taxes will affect their retirement accounts.
The only factor offered as a choice that did not receive at least 50 percent of the participants’ approval was the social responsibly of investments. Only 47 percent of plan participants considered that a factor in their investment decisions.
Interestingly, the less funds a plan participant had in their retirement accounts, the more they were interested in the social responsibility of their investments. Sixty-one percent of those with less than $10,000 in their retirement accounts were interested in whether their investments were going to socially responsible firms.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.