With National 401k Day just wrapped, the Investment Company Institute (ICI) is out with a reminder of how much employer-sponsored, defined contribution retirement plans really help.
More than 55 million Americans participate in 401k plans, which held an estimated $5.67 trillion in assets at the end of the first quarter of 2019, the investment research and advocacy organization says.
Investors with 401ks and similar accounts value the control and choice of investment options offered in their plans.
On average, 401k plans offer 27 investment options, which help investors create a diversified portfolio for their investing needs.
In addition, investors who hold mutual funds in their 401k plan accounts have benefited from the historical trend of declining mutual fund expense ratios and tend to concentrate their assets in lower-cost funds—meaning they are making the most of their retirement savings.
Americans Confident 401ks Will Help Them Meet Retirement Goals
According to an ICI household survey conducted in fall 2018, 77 percent of all US households surveyed indicated that they were confident that 401k and other employer-sponsored retirement plan accounts can help individuals meet their retirement goals.
Confidence among households owning at least one DC account or individual retirement account (IRA) in fall 2018 was even higher, at 83 percent. Even among households not currently owning retirement plan accounts, 62 percent expressed confidence in these plans.
“401k plans are a popular choice for investors, as they offer a flexible, proven way to save for retirement,” ICI Education Foundation (ICIEF) Vice President Tina Kilroy said in a statement. “Savers appreciate the features of 401k plans—including investment choice, tax advantages, and automatic payroll deductions—and express confidence that 401ks and similar workplace plans will help them achieve their retirement goals. We encourage savers to use National 401k Day as an opportunity to review their financial goals and make sure that they are on track to meet their retirement targets.”