NEW YORK - Despite extensive efforts to educate workers about saving for retirement, many employees are not doing a good job of managing their company-sponsored 401(k) accounts, a new study indicates.
The analysis of nearly 1 million retirement portfolios found that 69 percent have inappropriate risk or diversification of holdings and 36 percent have worrisome concentrations of company stock. In addition, one-third of savers aren't putting enough aside to qualify for the full company matching contribution.
The problems are especially pronounced among young and low-paid workers, according to the study by Financial Engines, a Palo Alto, Calif.-based firm that provides investment advice and managed accounts for defined contribution plans like 401(k)s.
"Unfortunately, our study found that those who need their 401(k) the most look to be benefiting the least," Jeff Maggioncalda, Financial Engines' president and chief executive, said in an interview.
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Nearly two-thirds of those earning less than $25,000 a year don't contribute enough to get the full company match, the study found . But 24 percent of those earning $50,000 to $75,000 a year and 12 percent of those earning more than $100,000 a year didn't get the full match, either.
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