We’ve seen plenty of data throughout 2022 showing that 401k participants are largely staying the course and sticking with stocks despite ongoing market volatility, and more evidence that is indeed the case is out today from the Investment Company Institute.
Americans using defined contribution (DC) plans to save for retirement stayed the course in the first three quarters of 2022, the latest ICI survey data of plans covering more than 40 million participant accounts shows.
“ICI’s research is showing that 401k investors save for the long term and prioritize keeping their retirement nest eggs intact,” said Sarah Holden, ICI Senior Director of Retirement and Investor Research. “Withdrawal activity was a bit lower than the same time last year, and retirement savers remain committed to their asset allocations.”
Defined Contribution Plan Participants’ Activities
Summary of recordkeeper data, percentage of participants during the first three quarters of the year indicated
DC plan participants’ withdrawal activity in the first three quarters of 2022 remained low, in line with the activity observed in recent years. In the first three quarters of 2022, 3.3% of DC plan participants took withdrawals, which is slightly lower than the 3.7% who withdrew funds in the first three quarters of 2021.
Most DC plan participants kept their asset allocations steady as stock values generally fell during the first nine months of the year. In the first three quarters of 2022, 7.4% of DC plan participants changed the asset allocation of their account balances, slightly lower than 8.3% in the first three quarters of 2021 and 9.5% in the first three quarters of 2020. In the first three quarters of 2009, when the United States was facing the challenging economic circumstances of the global financial crisis, 9.9% changed the allocation of their account balances.
Even fewer DC plan participants changed the asset allocation of their contributions. In the first three quarters of 2022, 3.8% changed how their contributions were allocated, much lower than 9.8% in the first three quarters of 2009.
To read more from the ICI survey, click here.
SEE ALSO:
• Younger 401k Participants Favor Investment in Equities
• Fidelity 401k Report Card: Silver Linings Among More Declines in Q3
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
