Although market projections look strong, 49% of retirement plan participants are making more conservative investments and leaning toward a fixed income; however, they lack knowledge over its role in their portfolios, according to a new study by State Street Global Advisors.

“Plan sponsors need to recognize participants’ new conservative mindset and design a plan menu that helps them invest to meet their financial goals,” says Fredrik Axsater, senior managing director and global head of defined contribution, SSgA. “Participants are afraid of losing their retirement savings and are shying away from making more aggressive allocations. This is particularly concerning for younger investors who may not understand how a conservative approach can limit the growth needed to fund retirement.”

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