Small-business 401(k) plan participants don’t have access to the same tools and resources that participants in large plans have, which could be putting them at a retirement disadvantage.

A survey conducted by Guardian Retirement Solutions found that both small and large plan participants have a hard time understanding retirement jargon. Most participants say they have heard of terms like “contribution rate” or “vesting” but they don’t understand how these terms affect their own retirement planning.

Small market participants, in particular, have less access to support and appear to be less knowledgeable and engaged in their workplace retirement plans.

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Only 65% of small plan participants say their company offers an employer match on their plan and only 53% said they have access to planning tools to help them estimate how much income they will need in retirement. The numbers are even lower for having a knowledgeable and responsive telephone service rep or a managed account program in which a financial professional selects, allocates and trades investments in their 401(k) plan for a fee.

“The RetireWell Study reveals a disconnect between small plan participants and their larger plan counterparts,” says Douglas Dubitsky, vice president at Guardian Retirement Solutions. “Americans rely almost exclusively on their 401(k) accounts for their retirement income, so making access to a broad range of investment options and support for employees of every size company is critical for better retirement outcomes.”

No matter the size of the plan, most plan participants expect the majority of their retirement income to come from 401(k) plans, with 77% of respondents saying it is the most important source of income in retirement. They expect their 401(k) savings to make up 34% of their retirement funds. Social Security is the second most important source of retirement income, with 62% of respondents saying it is very important. These people expect Social Security to make up 24% of their retirement income.

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Sixty-one percent said income from personal savings, including IRAs, was also very important, making up 12% of their retirement income. Earnings from employment, including self-employment also garnered 56% of the vote, making up about 10% of retirement savings.

Out of those surveyed, 92% said they were very or somewhat satisfied with their workplace 401(k) plan. Ninety percent said they were very or somewhat satisfied with the investments available to them in their plan and 87% said they were very or somewhat satisfied with the information they get about their plan.

Plan participants may have unrealistic goals when it comes to the amount of money they want to replace in retirement. According to The Guardian study, participants, on average, hope to replace 95% of their current income in retirement. Industry experts recommend a replacement ratio of between 70 and 80%.

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The majority of respondents were somewhat confident they would achieve their target income in retirement, while 21% were very confident. Twenty-two percent were not very confident and 6% weren’t confident at all.

Despite their confidence in their ability to retire comfortably, many respondents said they did not expect to live as well or better in retirement and they didn’t think they would have enough money to pay for health care. Nearly half said they expected to work in retirement.

The median deferral rate for plan participants was 9% of personal income, which is less than most industry professionals recommend. Those under age 50 contribute about $8,700 per year, while those over 50 contributed an average of $9,100 per year.

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More than half of all respondents said they save dollars outside of their workplace retirement plan and fully expect those funds to contribute to their retirement income, the study found.

Paula Aven Gladych is a freelance writer based in Denver.

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