Retirement―Ready or Not…

We queried over 1,000 workers to help us understand their attitudes toward, and behaviors regarding, retirement savings. What we uncovered can help companies reach higher plan participation, engage participants more effectively and help them achieve greater retirement confidence and better outcomes.

A Big Jump in Retirement Confidence

Percent of Employees Who Are Confident/Very Confident

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Confident or Not, Many Plan Participants Voice Concerns over the Timing of Their Retirement

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Participant Desire for Responsible Investing on the Rise

The Participant Perspective Counts in Responsible Investing. Is It Important that the Investment Options in Your Plan Adhere to Your Core Ethical Values?

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Dear Retirees: What Would You Do Differently?

If You Could Prepare for Retirement All Over Again, What Would You Do Differently?

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Misinformation Plagues Target-Date Funds

Percent of Respondents Answering Incorrectly (Who Know Whether They Use Target-Date Funds [TDFs])

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Financial Literacy: Too Many Workers Don’t Understand the Basics

We Asked Eight Simple Questions about Investing, and Many of Our Respondents Didn’t Fare Too Well – Too Many Workers Don’t Understand the Basics

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Who’s Who Among Participants?

We’ve Identified Three Distinct Investor Personas

• We know from our research that plan participants have varying degrees of investment sophistication, confidence and engagement

• If plan sponsors and providers approach participants by targeting the strengths and weaknesses of their personas, it may be possible to increase the knowledge of each group – and ultimately the retirement savings for all

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About AB’s Defined Contribution Research

The Defined Contribution (DC) team at AB has conducted annual surveys of employees since 2005 and biennial surveys of plan sponsors since 2006. These snapshots help us understand the attitudes and behaviors of workers toward retirement saving, the changing state of DC plans, and the concerns, perspectives and strategies of plan sponsors.
We want to share this research with plan sponsors. We believe it will help them understand how to lead participants to better savings outcomes and more comfortable, confident retirements. We conducted our 13th annual web-based plan-participant survey in May 2018. It was based on a national sample of 1,002 employees. Of these, 893 were full-time workers participating in a workplace retirement savings plan at their current employer and 109 were retirees who had previously worked full time and participated in a workplace savings plan. Break

“Target date” in a fund’s name refers to the approximate year when a plan participant expects to retire and begin withdrawing from his or her account. Target-date funds are not guaranteed against loss of principal at any time, and account values can be more or less than the original amount invested—including at the time of the fund’s target date. Also, investing in target-date funds does not guarantee sufficient income in retirement.

How our survey explained an additional target-date fund feature of a guaranteed stream of income in retirement:

“The income payments would be based on a percentage of your highest account balance in the years leading up to your retirement. This type of fund would be offered to you at a very competitive price. This type of enhanced target-date fund would offer you: an income stream that will last as long as you live; the potential to increase the size of your income stream with gains in your investments; income protection in down markets—they won’t reduce the size of your guaranteed payments; the flexibility to take part or all of your money out of your account at any time without incurring withdrawal fees.”

Note to All Readers: The information contained herein reflects, as of the date hereof, the views of AllianceBernstein L.P. (or its applicable affiliate providing this publication) (“AB”) and sources believed by AB to be reliable. No representation or warranty is made concerning the accuracy of any data compiled herein. In addition, there can be no guarantee that any projection, forecast or opinion in these materials will be realized. Past performance is neither indicative of, nor a guarantee of, future results. The views expressed herein may change at any time subsequent to the date of issue hereof. These materials are provided for informational purposes only and under no circumstances may any information contained herein be construed as investment advice. AB does not provide tax, legal or accounting advice. The information contained herein does not take into account your particular investment objectives, financial situation or needs and you should, in considering this material, discuss your individual circumstances with professionals in those areas before making any decisions. Any information contained herein may not be construed as any sales or marketing materials in respect of, or an offer or solicitation for the purchase or sale of, any financial instrument, product or service sponsored or provided by AllianceBernstein L.P. or any affiliate or agent thereof. References to specific securities are presented solely in the context of industry analysis and are not to be considered recommendations by AB. This is not intended to be legal advice (and should not be relied upon as such) but just a discussion of issues. Plan sponsors should consult with their legal advisors for advice regarding their particular circumstances. The [A/B] logo is a registered service mark of AllianceBernstein and AllianceBernstein® is a registered service mark used by permission of the owner, AllianceBernstein L.P. © 2018 AllianceBernstein L.P.

This document is for informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal or accounting advice. It does not take an investor’s personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service sponsored by AB or its affiliates.

The views expressed herein do not constitute research, investment advice, or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams. About AB’s Defined Contribution Research The Defined Contribution (DC) team at AB has conducted annual surveys of employees since 2005 and biennial surveys of plan sponsors since 2006. These snapshots help us understand the attitudes and behaviors of workers toward retirement saving, the changing state of DC plans, and the concerns, perspectives and strategies of plan sponsors. We want to share this research with plan sponsors. We believe it will help them understand how to lead participants to better savings outcomes and more comfortable, confident retirements. We conducted our 13th annual web-based plan-participant survey in May 2018. It was based on a national sample of 1,002 employees. Of these, 893 were full-time workers participating in a workplace retirement savings plan at their current employer and 109 were retirees who had previously worked full time and participated in a workplace savings plan.

“Target date” in a fund’s name refers to the approximate year when a plan participant expects to retire and begin withdrawing from his or her account. Target-date funds are not guaranteed against loss of principal at any time, and account values can be more or less than the original amount invested—including at the time of the fund’s target date. Also, investing in target-date funds does not guarantee sufficient income in retirement.

How our survey explained an additional target-date fund feature of a guaranteed stream of income in retirement:

“The income payments would be based on a percentage of your highest account balance in the years leading up to your retirement. This type of fund would be offered to you at a very competitive price. This type of enhanced target-date fund would offer you: an income stream that will last as long as you live; the potential to increase the size of your income stream with gains in your investments; income protection in down markets—they won’t reduce the size of your guaranteed payments; the flexibility to take part or all of your money out of your account at any time without incurring withdrawal fees.”

Note to All Readers: The information contained herein reflects, as of the date hereof, the views of AllianceBernstein L.P. (or its applicable affiliate providing this publication) (“AB”) and sources believed by AB to be reliable. No representation or warranty is made concerning the accuracy of any data compiled herein. In addition, there can be no guarantee that any projection, forecast or opinion in these materials will be realized. Past performance is neither indicative of, nor a guarantee of, future results. The views expressed herein may change at any time subsequent to the date of issue hereof. These materials are provided for informational purposes only and under no circumstances may any information contained herein be construed as investment advice. AB does not provide tax, legal or accounting advice. The information contained herein does not take into account your particular investment objectives, financial situation or needs and you should, in considering this material, discuss your individual circumstances with professionals in those areas before making any decisions. Any information contained herein may not be construed as any sales or marketing materials in respect of, or an offer or solicitation for the purchase or sale of, any financial instrument, product or service sponsored or provided by AllianceBernstein L.P. or any affiliate or agent thereof. References to specific securities are presented solely in the context of industry analysis and are not to be considered recommendations by AB. This is not intended to be legal advice (and should not be relied upon as such) but just a discussion of issues. Plan sponsors should consult with their legal advisors for advice regarding their particular circumstances. The [A/B] logo is a registered service mark of AllianceBernstein and AllianceBernstein® is a registered service mark used by permission of the owner, AllianceBernstein L.P. © 2018 AllianceBernstein L.P.

This document is for informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal or accounting advice. It does not take an investor’s personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service sponsored by AB or its affiliates.

The views expressed herein do not constitute research, investment advice, or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.

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