UpFront | Published in June 2017

Many Can't Describe a 401(k) Plan

People ages 55 to 64 had the most correct answers

By PLANSPONSOR staff | June 2017

When asked, “Which of the following describes a 401(k)?” fewer young Millennials chose the correct answer than did respondents from four other age groups according to a GOBankingRates survey of Americans about basic financial terms and concepts. It also found people ages 55 to 64 had the most correct answers, with 76% choosing “Retirement savings vehicle.” More than 60% of respondents ages 25 and older answered correctly. The age group with the fewest correct answers was the 18- to 24-year-old group (43%).

GOBankingRates says, for every age group—excluding 55- to 64-year-olds—at least one-fifth incorrectly selected “Tax credit for retirement” as the answer.