The Investment Company Institute is out with its latest roundup of retirement saving behavior, and things are looking up as we head for the holidays.
Americans continued to save for retirement through defined contribution (DC) plans over the first half of this year, according to ICI’s “Defined Contribution Plan Participants’ Activities, First Half 2018.”
The study tracks contributions, withdrawals, and other activity based on DC plan recordkeeper data covering more than 30 million participant accounts in employer-based DC plans.
The latest recordkeeper data indicate that plan participants remain committed to saving and investing, and only 1.4 percent of DC plan participants stopped contributing to their plans in the first half of 2018.
Other findings include:
Most DC plan participants stayed the course in their asset allocations.
In the first half of 2018, 7.1 percent of DC plan participants changed the asset allocation of their account balances, and 4.0 percent changed the asset allocation of their contributions.
These levels of activity were similar to the activity observed in the same time frame a year earlier.
Withdrawal activity for DC plans remained low in the first half of 2018 and was similar to the first half in the prior year.
In the first half of 2018, 2.2 percent of DC plan participants took withdrawals, the same share as in the first half of 2017.
Levels of hardship withdrawal activity also were low, with only 0.9 percent of DC plan participants taking hardship withdrawals during the first half of 2018, the same share as in the first half of 2017.
DC plan participants’ loan activity was little changed at the end of the first half of 2018.
At the end of June 2018, 16.5 percent of DC plan participants had loans outstanding, compared with 16.4 percent at the end of March 2018 and 16.7 percent at year-end 2017.
ICI has been tracking DC plan participant activity through recordkeeper surveys since 2008.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
