Participants comfortable with investing, risk, tech, per survey

Jul 7, 2020
  • BlackRock

The People & Money survey gauges beliefs and expectations about money and investing from people across the US. This year, the survey identified people participating in a DC savings plan and compared their responses to the general population.

The results: DC participants are more likely  to identify themselves as investors, and more comfortable with risk and financial technology, than those not in a DC plan. 

The comparison suggests that DC plan sponsors have done more than help participants build retirement savings. They have helped build a savings culture where participants are confident about investing, take advantage of financial tools and education, and are willing and able to seek advice.

All the data shown below is from the 2020 People & Money survey and compares the responses of those participating in a DC pan against those who do not participate in a DC plan.

“Investing is for people like me.”

One of the key questions in the survey asks whether respondents agree with the statement “Investing is for people like me.” DC investors agree in a significantly higher proportion:

Investing is for people like me.

It may be that plan sponsor efforts to enroll participants have helped remove lower perceptual barriers between their employees and the notion of investing as an elite activity. Does the willingness of the DC subset to identify with investing also mean they show greater comfort with key investment concepts? The People & Money survey suggests they do.


People & Money
People & Money
Percentage who agree with the following statements
Willing to take higher risk for higher returns. 43% 60%
Willing to tie up my money longer for higher returns. 57% 77%
Investing will help me reach a comfortable retirement. 69% 89%

More open to FinTech & advice

The DC subset may be more comfortable with investing and risk, but they align very closely with the overall population on the complexities of investing: 63% of participants and 64% of the overall population agree that "I find investing difficult to understand."

So what drives their greater comfort? Part of the answer may be that participants have the advantage of the tools and resources made available to them. The result is that they are more open to advice than their non-DC peers. Despite agreeing on the difficulty involved, nearly twice as many people in the general population say "ask no one" for advice (19% of them, compared to 10% non-DC).

The participant population's greater willingness to seek advice, and the high proportion who identify their plan as a source of financial knowledge, is further evidence of how plan sponsors have helped build an investing culture. Their increased willingness to seek advice also extends beyond their plan, as the table below suggests.


People & Money
People & Money
What are the sources of your financial knowledge?
Online sources 24% 32%
Financial advisor 13% 23%
Joining my company’s retirement plan 14% 29%

The DC subset is also more willing to embrace financial technology, for decision-making support and money management.


Willing to use new fintech platforms Use digital tools or apps to manage money Tools and apps have changed how I manage money.
People & Money
31% 29% 24%
People & Money
40% 37% 32%

Another encouraging finding is DC participants in the survey are more willing to use financial decision making tools to explore investment scenarios and calculate risk.

Greater optimism, despite financial obligations

In a separate BlackRock survey1, 92% of DC participants agree that they are happier and more confident because they are saving for retirement. The People & Money survey helps bear this out.

Future wellbeing

When asked about their current wellbeing, the DC subset’s is nearly twice as optimistic when we compare the extreme ends of the response.

Future prospects

The DC subset's greater optimism does not appear to be correlated with a lack of other financial obligations. In fact, they are more likely to state financial goals associated with potential stress:


Financial goals US Non-DC US DC
Paying Debt (Credit Card, etc.) 39% 58%
Paying Mortgage 16% 30%
Saving for a Down Payment 16% 22%
Financing Children’s Education 12% 26%

Unsurprisingly, the DC subset is more focused on retirement, with 61% of them listing it as a goal, as opposed to 30% of the overall population. Dagmar Nikles, head of Plan Design Strategy for the BlackRock Retirement Group, believes that the greater focus on retirement may be a foundation for their optimism. “We find that merely being cognizant of retirement challenges is an important first step in taking action - and that taking action builds confidence.”

Realistic retirement expectations

That focus on retirement may have also helped the DC subset formulate perhaps more realistic retirement expectations:

  • Only 26% of the DC subset define retirement as not working entirely, as opposed to 43% of the non-DC population. Also 52% expect to continue working part or flex time, compared to 38% of the non-DC population.
  • The DC subset is also more likely to define their retirement object as "maintaining a standard of living consistent to when I was working" (54% of them, compared to 37% non-DC).

Ultimately, the participants in the DC subset are more likely to state that they are on track for achieving the retirement income they want (36% to 16%).

The bottom line: a solid foundation

The comparison between the DC subset and the general investor population in the People & Money survey suggests that defined contribution has not only provided a solid foundation for many American workers to save for retirement, it has helped build a culture where participants think of themselves as investors and are willing to seek out the advice and tools to help them along the way.

While expanding the reach of the DC system is a priority--as is evolving new solutions to meet the growing retirement challenge--the surprising comfort, confidence, and realism from DC participants suggests that the system could potentially support new solutions and drive greater growth of retirement assets.