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Investors Expected to Stick with 401(k)s


A significant number of investors in retirement are planning to increase their contributions to their 401(k) plans and become more aggressive in their allocations in 2001, according to a recent survey by Fidelity Investments of Boston.

Forty-one percent of 401(k) investors who participated in the survey, conducted in November, said they plan to increase the amount they will contribute to their 401(k) plan in 2001. In a similar survey conducted in March 1999 by Fidelity, 35 percent of 401(k) investors said they were planning to increase their contribution amounts.

In the latest survey, 31 percent of 401(k) investors said they would invest their portfolios more aggressively in 2001. This compares to 39 percent in the 1999 survey.

"We are seeing strong evidence that 401(k) participants with long-term investing horizons are planning to stay the course this year, despite the difficult markets last year," said Peter J. Smail, president of Fidelity Employer Services Company, in a statement. "401(k) investors typically don't react to market volatility and that's a trend we saw again last year."

The survey, for which 486 telephone interviews were conducted, also indicated that the confidence among 401(k) investors about their financial status in retirement had slipped. About 76 percent of those interviewed said they are, "somewhat or very confident that they will have enough money saved to provide the kind of lifestyle they plan to live during retirement."

In the 1999 survey, 94 percent of Fidelity's 401(k) investors had said they were somewhat to very confident that their investment choices would meet their long-term retirement goals.

The recent survey also found that 54 percent of investors expect a 401(k) plan, either theirs or their spouses', to be the primary source of their retirement income.