Americans like their 401(k)s, but can be pretty clueless about how to use them to maximum effect—leaving them less-than-well-prepared for retirement.

Findings from a survey from the Guardian Insurance & Annuity Co. Inc. included this and other unsettling news, such as how few Americans understand some of the basic terms needed to use a 401(k) efficiently and how few understand how to get the most from their plans.

The "Guardian Small Plan 401(k) RetireWell Study SM2.0: What's Working and Not Working for Small Plan Participants" revealed that, while 50 percent of respondents said they'd heard of target-date funds, 45 percent had heard of dollar cost averaging and 39 percent were familiar with target risk funds; while 66 percent of those claiming familiarity with target-date or target risk funds didn't really know what those terms meant. In addition, 77 percent say they've heard of vesting, but fewer than half understand what vesting is.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and events
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.