When the stock market plunged during 2007 and 2008, the retirement savings millions of American investors plunged along with it. Since so many of these retirement savings plans were 401(k)’s, the effectiveness and true value of this ‘solid’ retirement savings vehicle came into question for many. Everyone from industry experts, media outlets nationwide, and many, many American families hit hardest – began strongly considering whether or not there is a legitimate value, and security in their 401(k) retirement plan.

The 11th Annual Transamerica Retirement Study, is disputing this argument.  Their study surveyed 3,598 full- and part-time employees between December 3, 2009 and January 18, 2010, and their findings portray another side of the story.  It has shown that not only do 401(k) plans help Americans save for retirement, they also increase plan participants’ overall knowledge in investing for their retirement.

The study shows that since most 401(k) plans draw a 77% participation rate, then evidently something must be going right. The plans offer many benefits such as convenience of payroll deduction, (i.e. paying yourself first), a wide range of investment options, and the opportunity to choose what to invest in and where - three very positive reasons to take advantage of 401(k) plans.

Those with access to a 401(k) plan are also more likely to have a retirement planning strategy  61% compared to 40% of those without one. Even more unsettling, 39% of those with a plan and 60% of those without one have no retirement strategy at all.

 The risks of 401(k) investing have been revealed over the last few years. Awareness still remains low amongst many employees. Accordingly, it is particularly important for employees to learn of the benefits of a 401(k) plan and what it can mean for their long-term retirement goals.