A Pew Charitable Trusts survey looked at the difference in behavior between workers who participated in employer-sponsored retirement plans [e.g., 401(k) plans] and those who did not participate in such plans. More than one-third of private-sector workers lack access to workplace plans. Slightly more than three out of 10 (31%) who have access don’t participate in such plans.

Among the survey’s findings were:

• Retirement Planning Is More Common Among Participants: More than two out five participants (41%) in workplace savings plans said they have engaged in retirement planning within the past two years. In contrast, just 16% of those without access, and 14% of those with access, who have never participated say that they have planned for retirement. About half of all respondents who answered in the affirmative reported using online tools or calculators, though many admitted to simply guessing.
  
• Participants Are More Likely to Save in Outside Accounts: When asked about saving for retirement in external retirement accounts (e.g., an IRA), 53% of those participating in a workplace retirement plan said they do so. Conversely, just 15% of those who have both never participated and lack access to a workplace plan have such savings.
  
• Not Being in Workplace Plans Adversely Affects Saving Habits: Approximately 40% of participants who either lack access or have access to employer-sponsored plans but don’t participate in them say they have not contributed anything to retirement savings within the past two years.
  
• Majority of Survey Participants Would Not Contribute Windfall Savings to Retirement Accounts: When asked what they would do with a $10,000 windfall, only 36% of respondents said they would set aside some of it for retirement. Those who both lack access and have never participated in a plan were the most willing to use the windfall to boost savings (43%), while just 36% of those currently participating in a plan say they would boost their savings. When given other options for spending the windfall, respondents from all categories allocated the largest dollar amounts to paying down debt.
  

Source: “Workplace Retirement Plans Tend to Sharpen Focus on Financial Futures;” The Pew Charitable Trusts; February 2018.

Related

Feature

When You Haven't Saved Enough for Retirement

Mutual Funds

A Second Look at How Target Date Funds Change Their Allocations

Beginning Investor

Setting Up and Managing Your 401(k)