Reflections in the Mirror Non-FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee American Century Investment Services, Inc. – Distributor ©2014 American Century Investments Proprietary Holdings, Inc. All rights reserved Participants offer their perspectives and perceptions around retirement savings August 19, 2014 Casey McCarthy, C(k)P, CIMC, CFS Vice President, DCIO Sales

What we wanted to learn 2  Why do participants delay saving?  How can we overcome those barriers?  How can we avoid having regrets once we get to those pre-retiree years?

What we heard 3  Participants are fairly self-aware about what they should do against what they are doing.  At the same time, participants are contradictory about preparing for retirement.  Plan sponsors have some inaccurate assumptions about what participants want.

4 Evaluating saving during first five years of working

Obstacles to saving today are universal 5  Not earning enough  Paying off debt  Having unexpected expenses (n=1,007) (n=612)

Early obstacles differ by age (n=1,007) (n=612)

Evaluating current level of saving 7 * Plan sponsor evaluation of employees

8 Common sentiments about retirement Retirement savings is one of the biggest goals It is far worse to have too little in retirement than to lose the opportunity to enjoy money today. If I save more for retirement, I will better handle the challenges I might face when I get there (n=1,007) (n=612)

Overall, pre-retirees expect the same standard of living 9 Financially speaking, do you expect your standard of living in retirement will be…? (n=1,007)

Younger workers are slightly more optimistic 10 Financially speaking, do you expect your standard of living in retirement will be…? (n=612)

Few participants plan to save a fair amount more (n=1,007) (n=612) Thinking about between now and when you retire, how much do you plan to have taken out of your paycheck to fund your retirement savings plan?

Participants are self aware 12 “If you could talk to yourself in your early career, how important would it be to advise yourself to save more?” “Very important” to more than 50% 1 “How likely do you think your early career self would have been to listen to that advice? “Very likely” to less than 15% (n=1,007) (n=612) (n=913) (n=533)

Participants and sponsors have slightly different views of importance of certain features 13 Providing model portfolios that show how employees with different risk appetite and age might invest their money Providing educational seminars and materials Having automatic enrollment Having automatic increases each year in amount invested (n=1,007) (n=612)

Participants support automatic enrollment at a higher level 14 Suppose the company you worked for has an automatic enrollment option where 6% got taken out of employees’ checks automatically for their retirement plans. Is this something the company Should do Should not do (n=1,007) (n=612)

15 Employers underestimate how much employees want * Median % of employees plan sponsors believe want each level of encouragement

16 Participants and sponsors grade the plan * Self rating on job managing defined contribution plan

Roughly two-thirds want their plan provider to educate them 17 To what extent do you agree or disagree with each of the following statements? I wish the financial company that provides my company plan would do more to come into the workplace and educate me

18 Participants find advisors and studying most useful

Participants look to financial advisors 19 Do you currently have a financial advisor? (n=1,007) (n=612)

Going forward, participants see major roles for advisors 20 A professional financial advisor Your own research Your employer Family Friends and colleagues The government

Summary 21  Participants across age groups acknowledge the importance of saving, especially for retirement  Participants generally understand what needs to be done, and their behavior is predictable.  Employer decisions around plan design and communications are powerful, including access to an advisor. The survey was conducted in February 2014 among 1,619 total respondents. Data were weighted to reflect the makeup of key demographics (income, gender and education) among all American private sector plan participants between ages 25 and 65 (according to estimates from the 2012 U.S. Consumer Population Survey). Data collection and analysis were completed by Mathew Greenwald & Associates, Inc., of Washington, D.C.

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