As Barbie fever grips America on the heels of last weekend’s scorching box-office debut of the live action movie, the U.K.’s Daily Mail is out with a lighthearted yet interesting look inside Barbie’s hypothetical 401(k)—and it turns out she’s a pretty good retirement saver.
Positing that Barbie is now 64 years old—making her what they say is the average age Americans start withdrawing from their 401(k), the Daily Mail asked some experts to estimate what the unmarried, childless doll who has had roughly 200 careers would have stashed away in her 401(k).
Starting in 1959 as a “teenage fashion model” and eventually embarking on a wide range of careers including as a fashion designer, flight attendant, nurse, surgeon, rock star, business executive, TV chef, robotics engineer, and scientist, Barbie has had multiple opportunities to build 401(k) balances since 401(k)s first became available in 1978.
The tabloid and website quotes CFP Andrew Latham of comprehensive financial services comparison site Super Money: “We can safely assume that she’s made the maximum allowable 401(k) contributions since the program started in 1978 and took advantage of catch-up contributions when she hit 50. Barbie is a finance superstar and invested her 401(k) in a diversified portfolio that has provided an average annual return of 7%. Now, at 64 years old and still as fabulous as ever, her 401(k) account balance stands at around $3.5 million.”
The article notes that in 2023, workers can contribute $22,500 a year to their 401(k), but it first launched in 1978, workers were entitled to save as much as $45,475.
It goes on to quote Fidelity Investments VP of Retirement Products Rita Assaf: “Depending on what Barbie did after leaving each of her 200 jobs, she may have assets in 401(k)s from various employers, as well as a few Rollover IRAs.”
Assaf recommended Barbie consult a financial planner to work out exactly how to take control of her nest egg, and the story also delves into when Barbie should start taking Social Security.
As you might have guessed, Barbie will likely wait until she hits 70 to get the largest possible benefit.
1 in 5 don’t know what a 401(k) is
While Barbie was apparently in tune with the advantages of the 401(k) from the start, a new survey finds 21% of Americans don’t actually know what a 401(k) is.
The survey from real estate data company Clever found that familiarity with the retirement plan varies greatly by generation. Just 60% of Gen Z knows what a 401(k) is, whereas 72% of Millennials, 82% of Gen X, and 95% of Boomers do.
Across generations, Americans generally agree about some conventional wisdom of personal finance. Eighty-five percent say that investing in a 401(k) or individual retirement account (IRA) is the easiest way to save for retirement, and 81% agree that consistent, long-term investing for retirement is preferable to trying to time the market.
The study also highlights the significance of money management skills, with 46% of Americans considering them among the top five most essential skills. This surpasses the importance Americans give to communication skills (42%), problem-solving skills (42%), critical thinking skills (36%), and maintaining one’s mental health (33%).
This aligns with Americans’ support of making financial education more of a priority for young adults. About 82% of Americans desire increased emphasis on personal finance in high school and college curriculums. Just 29% of college graduates report that their schools prepared them for managing their student loan repayment.
20 “Least Worst” 401(k)s of 2022
Finally, BenchMine, a free-to-use comparative analytics engine with the most recent publicly available 401(k) data from the Department of Labor, reports that the early federal data for 2022 retirement plan performance was recently released and “is looking grim.”
BenchMine found that of the 576 companies who have submitted their Form 5500 data to the DOL, only one has a positive yield (a measure of net investment returns). Every other plan so far has a negative score.
- Peterman Heating, Cooling & Plumbing in Greenwood, Indiana is the standout so far with a yield of 12.91%, despite higher administrative costs and a low diversity of assets.
- Here is a list of the 20 least worst plans out of all of the reported data so far. Each name can be clicked to reveal more comparative insights.
BenchMine calculates yield as net earnings on investments divided by total assets at the beginning of the plan year, times 100.
SEE ALSO:
• How AI is Simplifying 401(k) Plan Comparison