Show me the finish line: 401(k) savers say they want help understanding how much they'll need for retirement

Workers identify sources they will use to create a 20-year-plus “retirement paycheck”;
expect 401(k) will provide nearly half of retirement income

The area where 401(k) participants say they could most use help is understanding how much they’ll need to save for retirement, according to a nationwide survey of 1,000 401(k) plan participants from Schwab Retirement Plan Services.

Over two thirds (68%) of participants gave an estimate of how long their retirement savings will last, with the average being 24 years. The remaining 32% say they do not know how many years their retirement savings might last, and the level of uncertainty is higher among women (40%) than men (25%).

On average, participants in the study plan to retire at age 65 and estimated they need to save $1.9 million for retirement. The top five areas they would like help with are:

  • Calculating how much they need to save for retirement

  • Anticipating tax expenses

  • Determining their retirement age

  • Creating an income stream in retirement

  • Receiving specific advice on how to invest their 401(k)

Golladay quote

“Every step of the way, retirement planning is a constant balance between saving and spending. In the years before retirement, we have to meet our day-to-day financial commitments while still keeping an eye on our long-term savings goals. Once we get to retirement, we want to be able to enjoy our hard-earned savings, but also make them last, likely over a period of decades. Talking to a financial professional can provide important clarity regardless of where you are on that journey. Even if you think your financial situation doesn’t warrant outside help, having that conversation with a professional is a valuable step to take.”

Catherine Golladay, executive vice president and head of Workplace Financial Services at Charles Schwab & Co., Inc. 
Catherine Golladay, President, Schwab Retirement Plan Services

The study finds participants’ confidence in making investment decisions in their 401(k) increases significantly with the help of a financial professional. Almost half (49%) report they would be very confident in their investment decisions with help versus only a third (32%) feeling very confident on their own, yet only half (50%) of those surveyed said they felt their situation warrants financial advice.

Income in retirement: Where will it come from?

When it comes to building a retirement paycheck, participants expect 44% of it to come from a 401(k). The remaining 56% is expected to come from a range of different sources:

Saving up

Contribution rates reflect the importance that participants are placing in their 401(k)s. More than one in four (26%) say they contributed the maximum allowed in 2019. In addition, the average amount participants contributed to their 401(k)s was up 20% compared to last year’s survey: $10,562 in 2019 vs. $8,788 in 2018.

Outside their 401(k), participants are more likely to be saving for retirement in a savings account versus investing in the markets. More than half (57%) say they are using a savings account to save for retirement, while less than half say they are investing for retirement in an IRA (48%) or a brokerage account (38%).

“You want every dollar working as hard as possible for you when it comes to retirement savings,” said Golladay. “While consistent, disciplined savings habits are critically important, the investment choices typically available to you through an IRA or Health Savings Account may have more growth potential, for example, than deposits in a regular savings account.”

Retirement spending: Anticipating healthcare expenses

More than three-quarters (77%) of 401(k) participants are offered a Health Savings Account (HSA) and almost half (45%) currently use it.

For many, their HSA is helping to pay for their current health insurance deductibles or unexpected short-term healthcare costs. In addition, two in five (41%) currently are using their HSA to save for healthcare costs in retirement. In 2019, 33% contributed enough to their HSA to cover their immediate needs and set aside money for retirement.

“Healthcare is one of the leading expenses that people need to plan for in retirement. Like 401(k)s, HSAs are another way to save and invest your money now to help you prepare for the future,” said Golladay. “Increasingly, workplaces are adding HSAs to their line-up of financial wellness solutions for employees, and long term, this will be another important building block for people’s retirement security.”



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About the survey

This online survey of U.S. 401(k) participants was conducted by Logica Research for Schwab Retirement Plan Services, Inc. Logica Research is neither affiliated with, nor employed by, Schwab Retirement Plan Services, Inc. The survey is based on 1,000 interviews and has a three percent margin of error at the 95 percent confidence level. Survey respondents were actively employed by companies with at least 25 employees, were 401(k) plan participants and were 25-70 years old. Survey respondents were not asked to indicate whether they had 401(k) accounts with Schwab Retirement Plan Services, Inc. All data is self-reported by study participants and is not verified or validated. Respondents participated in the study between May 28 and June 11, 2020. Detailed results can be found here

About Charles Schwab

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Schwab Retirement Plan Services, Inc. and Charles Schwab & Co., Inc. are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Schwab Retirement Plan Services, Inc. provides recordkeeping and related services with respect to retirement plans. Brokerage products and services are offered by Charles Schwab & Co., Inc.

Workplace Financial Services is a business enterprise which offers products and services through Schwab Retirement Plan Services, Inc.; Schwab Stock Plan Services; and Compliance Solutions. Schwab Retirement Plan Services, Inc., provides recordkeeping and related services with respect to retirement plans. Schwab Stock Plan Services is a division of Charles Schwab & Co., Inc. providing equity compensation plan services and brokerage solutions for corporate clients. Compliance Solutions is comprised of Schwab Designated Brokerage Services (DBS), a division of Charles Schwab & Co., Inc., and Schwab Compliance Technologies, Inc. (SchwabCT). DBS provides brokerage solutions for corporate clients who monitor their employees' securities activity. SchwabCT provides technology solutions for corporate clients to help facilitate their compliance technology program implementation. Schwab Retirement Plan Services, Inc., Schwab Compliance Technologies, Inc., and Charles Schwab & Co., Inc. (Member SIPC) are separate but affiliated entities, and each is a subsidiary of The Charles Schwab Corporation.

Through its operating subsidiaries, The Charles Schwab Corporation (NYSE: SCHW) provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,, and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; compliance and trade monitoring solutions; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at and

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