About 10,000 baby boomers in the US retire every single day. But just 15% of Americans born between 1946 and 1964 consider themselves to be “very confident” in their retirement preparedness.
Those numbers come from a new study by J.D. Power, which polled more than 8,300 people who participate in group retirement plans such as a 401(k). The study found that not all plans are created equal, and the level of satisfaction people have with their retirement plans has a lot to do with their confidence in their overall retirement preparedness. The results reveal which retirement plans are rated the highest by the people who participate in them. Once you learn which plans are the best liked, you might want to consider switching to one of those or asking your employer to offer them if they’re not currently available.
What keeps people satisfied with their retirement plans? The study attributed a score to each provider across three categories—large, medium and small plans—with 1,000 being the highest possible score. The scoring scale was based on the study participants’ responses to questions about six key features of their retirement plans—communication, information resources, plan features, fees and expenses, investment and service offerings, and interaction across live and digital channels. Those who were “very confident” in a majority of those areas were much more likely to be satisfied with their plans overall and their retirement prospects in general.
One of the most significant findings is that confidence was highest with plans that offered robust digital and mobile offerings but also put a heavy premium on old-fashioned human interaction.
Schwab rules the big-plan roost. In the realm of large company plans, the average satisfaction score was 773. With a score of 821, Charles Schwab ranked highest out of all 13 providers that the study examined. Nationwide, Bank of America and T. Rowe Price all scored well, too, coming in below Schwab but still in the 800s.
Bank of America dominates the middle. Bank of America’s 836 satisfaction score topped Schwab’s score in the large company category. Fidelity Investments and Nationwide were the only other providers to score in the 800s in the medium category.
Fidelity is the top small-plan provider, although satisfaction is lowest in that category. Not a single provider in the small-plan segment reached 800, with Fidelity Investments leading the pack with 790 and Nationwide just behind with 789. After that, there was a steep drop-off. In fact, the overall small-plan average was a relatively paltry 730.