Commitment to 401(k) Investing Remains Strong

A mere 2.7% of Americans stopped contributing to their defined contribution plan in 2017, the ICI reports.

Americans remain committed to saving for their futures, according to the Investment Company Institute’s (ICI’s) report, “Defined Contribution Plan Participants’ Activities, 2017.” A mere 2.7% discontinued contributions during 2017, and 3.4% took withdrawals, virtually on par with the 3.3% who did so in 2016.

Only 1.7% took hardship withdrawals, up only slightly from the 1.6% who did so the year earlier. In 2017, 9.3% of defined contribution (DC) plan participants changed the asset allocation of their account balances, and 5.5% changed the allocation of their contributions. The ICI said this is similar to the activity in 2016.

Loan activity ticked downward, with 16.7% of DC plan participants having an outstanding loan at the end of December 2017, down from 17.0% the year earlier. The ICI also said that assets in 401(k) plans and other DC plans in 2017 rose to $7.7 trillion, comprising 27% of the nation’s total $28.2 trillion in retirement assets.

The ICI noted that in 2017, the S&P 500 rose 21.8%. ICI’s analysis is based on a survey of a cross section of recordkeeping firms representing a broad range of DC plans, covering more than 30 million DC plan accounts.