Data and Research May 28, 2026

Research Finds Most TDF Investors Stay Fully Invested Over Time

The EBRI/ICI study found that 85% of surveyed plan participants maintained their all-target-date-fund lineup for at least six years. 

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Target-date funds are increasingly the dominant investment option in 401(k) plans, both as default options and as participant-selected investments. Most participants who were fully invested in TDFs at the end of 2016 remained fully invested over a studied six-year period, according to new research from the Employee Benefit Research Institute and the Investment Company Institute.

The retention pattern reflects the broader adoption of the funds, driven by a combination of regulatory support and 401(k) plan design and participant behavior, according to the paper, “A Closer Look at 401(k) Plan Target Date Fund Investors’ Account Balance Asset Allocations Over Time.” 

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The Pension Protection Act of 2006 and subsequent Department of Labor regulations established guidelines for default investment options. As a result, in 2007, the Department of Labor issued guidance that indicated that balanced funds, TDFs and professionally managed accounts could be used as qualified default investment alternatives. While TDFs had been available since 1994, the guidance accelerated their adoption as a leading QDIA.

In PLANSPONSOR’s 2026 Plan Benchmarking Report, 88.4% of surveyed defined contribution plans reported offering TDFs on their investment menus.

Participants have also broadly embraced TDF investing. As of year-end 2022, 68% of 401(k) plan participants in EBRI and ICI’s database held TDFs, and 38% of 401(k) plan assets were invested in TDFs. Prior research by EBRI and ICI also showed that of participants holding TDFs at year-end 2018, 88% had allocated their entire account balance to a single age-appropriate TDF.

“The durability of target-date funds reflects the value participants place on their intuitive, age-based investment approach,” said Shelly Antoniewicz, ICI’s chief economist, in a statement. “Their ability to simplify long-term investing has made TDFs a standard option in many 401(k) plan investment lineups.”

Among 2.1 million participants in the EBRI and ICI database who remained in the same plan from year-end 2016 through year-end 2022, 55% held at least some TDFs, while 36%—about 700,000 participants—held all of their account’s assets in them.

Of the consistently fully invested plan participants, from year-end 2016 to year-end 2017, 96% were still full-TDF investors. After six years, 85% remained full-TDF investors.

While most full-TDF investors remained fully invested through the six-year period, the research provided two caveats for a potential decrease in fully invested behavior.

First, 401(k) participants who exited TDFs before year-end 2016 were not included in the sample and, thus, were not counted as lacking persistence. Second, the database did not capture reallocations within a year or shifts between different TDFs that maintain a 100% TDF allocation.

“As more individuals invest in TDFs in their 401(k) plans, our research shows that most remain invested in them over time, helping them continue to have a diversified investment strategy while accounting for income needs as they move closer to and into retirement,” said Craig Copeland, EBRI’s director of wealth benefits research, in a statement.

The 2022 EBRI and ICI 401(k) database contained information on 83,630 401(k) plans with roughly $900 billion in assets and 12.3 million participants.

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