This paper provides an update of a longitudinal analysis of 401(k) plan participants drawn from the EBRI/ICI 401(k) database. The Employee Benefit Research Institute (EBRI)[i] and the Investment Company Institute (ICI)[ii] also produce an annual cross-sectional analysis, which covers 401(k) plan participants with a wide range of participation experience.[iii] But that snapshot cannot determine how 401(k) participants’ asset allocations change over the years. For example, because of changing samples of providers, plans, and participants, changes in asset allocation for the entire database are not a reliable measure of how individual participants have acted. A consistent sample is necessary to accurately gauge changes, such as in exposure to equities or target date fund use, for individual 401(k) plan participants over time. This paper will examine the accounts of consistent participants, that is, those who maintained accounts in each year from 2016 through 2022.

Key Findings:

This paper provides an update of a longitudinal analysis of 401(k) plan participants drawn from the EBRI/ICI 401(k) database.

Because the annual cross sections cover participants with a wide range of participation experience in 401(k) plans, meaningful analysis of the potential for 401(k) participants to accumulate retirement assets must examine the 401(k) plan accounts of participants who maintained accounts over all of the years being studied (consistent participants). For example, because of changing samples of providers, plans, and participants, changes in account balances for the entire database are not a reliable measure of how individual participants have fared. A consistent sample is necessary to accurately gauge changes, such as growth in account balances or changes in asset allocations, experienced by individual 401(k) plan participants over time.

A few key insights emerge from looking at the 2.1 million consistent participants in the EBRI/ICI 401(k) database over the six-year period from year-end 2016 to year-end 2022.

• The average 401(k) plan account balance for consistent participants rose each year from year-end 2016 through year-end 2021 before falling in 2022 alongside stock and bond market declines. Overall, the average account balance increased at a compound annual average growth rate of 13.8 percent from 2016 to 2022, rising from $70,664 to $153,680 at year-end 2022. The median 401(k) plan account balance for consistent participants followed a similar pattern and increased at a compound annual average growth rate of 20.8 percent over the period, to $68,080 at year-end 2022.
• Younger 401(k) participants or those with smaller year-end 2016 balances experienced higher percent growth in account balances compared with older participants or those with larger year-end 2016 balances. Three primary factors affect account balances: contributions, investment returns, and withdrawal and loan activity. The percent change in average 401(k) plan account balance of participants in their twenties was heavily influenced by the relative size of their contributions to their account balances and increased at a compound average growth rate of 48.6 percent per year between year-end 2016 and year-end 2022.
• 401(k) participants tend to concentrate their accounts in equity securities. The asset allocation of the 2.1 million 401(k) plan participants in the consistent group was broadly similar to the asset allocation seen in the annual EBRI/ICI 401(k) database updates. On average, at year-end 2022, about 70 percent of consistent 401(k) participants’ assets were invested in equities—through equity funds, the equity portion of target date funds, the equity portion of non–target date balanced funds, or company stock. Younger 401(k) participants tend to have higher concentrations in equities than older 401(k) participants.
• Consistent 401(k) participants’ exposure to equities was relatively unchanged between year-end 2016 and year-end 2022. At year-end 2016, 92.8 percent of consistent 401(k) plan participants held some equities (equity funds, target date funds, non–target date balanced funds, or company stock). This was little changed at year-end 2022, with 94.8 percent of consistent 401(k) plan participants holding equities.
• Consistent 401(k) participants increased their exposure to target date funds between year-end 2016 and year-end 2022. At year-end 2016, 55.3 percent of consistent 401(k) participants held at least some target date fund investments in their 401(k) accounts, and that share increased to 60.0 percent at year-end 2022. The net movement toward target date fund use over the period occurred among consistent 401(k) participants in all age groups. Participants in their twenties had the highest use of target date funds in both periods but experienced the smallest net change.
• Most consistent 401(k) participants who were fully invested in target date funds at year-end 2016 remained fully invested in target date funds at year-end 2022. Among consistent 401(k) plan participants who were fully invested in target date funds at year-end 2016, nearly 90 percent were fully invested in target date funds at year-end 2022. This high level of persistence in target date fund investing was observed across all participant age groups.

Figure A5 Figure 8 Figure A2 Chan 40 g1 e(k s ) in Pl A an ll o Cc oa nti tr o ib nu to tio T na sr , g In ev t e D sa tm tee F F F niiu t g gn R u ud re re etu s 6 5 A rnm s,o B ne gn C efi ots ns D is is te bn ut rs 4e 0 d 1,(k an ) d Pa Ars tis c eits pants Consistent Sample Had Longer Tenure Than Participants in the EBRI/ICI 401(k) Database at Year-End 2022 Annual flows reported on Form 5500 and year-end assets, billions of dollars, 2000–2023 Consistent 401(k) Participants' Investment in Equities Yo Pu en rce gn etr a g Pa e o rfti co cin p sia st n ets nt 4 T0e 1n (k) d p to ar tH icia pv an et s Lb a y rg ag e er, Sh yeaa r-r ee ns d 2 A 0l1 lo 6 c aa nd te ye d ato r-e n Eq d 2 u 0i2 ti 2es Fi gure 3, Account Balances Tend to Increase with Age and Tenure ..................................................................... 8 W the Reflect • Few cons References Mor ith nin lar Balance • drawa ge in gstar 40 g sist t th ls a net 1( en . d fun ei 2k) p t 4 nd r h 02 movem 0 2. id borrow gh 1( ar s Mornin are poole k er ti ) avera cipants ent partic ing to gsredu ge ip ward tar Lifecycl d ants ten a ac cco ge targ e had d and te 4 unts invest to 01(k) et n c e o d o Al ate fund p nure, nce part locatio lan ntr ed of acco the th n in both sto at u Ico eir 4 unt balanc e their s nd ensis o ex 01 ver the es ( tent g ( acc kck ) Ju bal es in sne period an ro oa unts )up al . Ch nce d bon the s occurre is cago: Morn in io had EBRI nves ds. Th equ /ICI ted it averag d ey y s i amo 4 are nings 0 equities, ecuri 1( ng e cl ktar, an )a co data ti sd s In es nsis ifi m an ed c. Avail .base, ed T tent dhe into t ia net n ac ass w 40 abl movem w hi 1 count et allo o subcate ( le loan ek) at pabal cation of ent rticip an gori away ces ants es: Sarah Holden is Senior Director of Retirement and Investor Research at the Investment Company Institute (ICI). What Does Consistent Participation in 401(k) Plans Percentage of participants by years of tenure, year-end 1 2 and Target Date Funds Figure 4 11 27 P 22 ercentage of 401(k) plan account balances allocated to equities by age, 2022 Figure 3 Co Thntributio is system o n af classificati mounts and c on do ontri es n butio ot co n ra nsi tes tend der the to nu increase with age mber of distinct inve and ea stment opti rnings. S on ee Figures A3 s presented to a given and A4 in Bra partici dy a pan nd t, repayment from that in that w thtarget eir fort ere the https: z m h date ero ies uc 2. as h //as 1 h and a fold mi hi upositiv nd gh s lli fi ing occur ets on fties. s er and .co tha 4 e0 i ntents 1( m n t non k pact. red bet ) he – pl tack target date aver an W part wee .i ith o/v3/ass age dra n icip a y wal nd ear b ants a m ets act l-anced e i ed nd 2016 /n ivity blt ia the n abf f a acc ucons mo 2 nd a74 and ount balanc s ng .ist 13d5 act y ent ear ive a8f05/ group was -end Des C p 20 bl of la t4 2n partici the 2 121 b . To b ro 38 ro adl hav a4 ader p y sim ants 1867a e z EBRI/I ero i ilar s7ec rel i to nves CI at /6 the ive 2tm 40 b077 ass ly rare. 1 e( nt i k) et all 8ea d n equities, ata 064e3 Typi ocation see base ca 56 lly, ( a Fi the baf4 gure n Steven Bass is an economist at ICI. Craig Copeland is the Director of Wealth Benefits Research at the Employee Brady, Peter, and Steven Bass. 2021. “Who Participates in Retirement Plans, 2018.” ICI Research Perspective 27, no. 8 Figure 4, Changes in 401(k) Plan Account Balances Among Consistent 401(k) Participants .................................. 10 Generate? Changes i Chn 401(k) anges in 100 percPlan Acco ent allo In cta et rie o sn t, td oi v tia dre gnu ed ts nt Balances d , a gta ei n fs u,n a dn sd and Changes P e in rce 4 n0 ta 1 g(k e o ) fPl coa nsi nst A en ctc 4o 0u 1(n k)t pB ara til ci a pn an cte s s b y A am geo , ye ng ar -C en o dn 2s 0i1s 6te an n dt ye 40 ar1 -e (k nd ) 2 Pa 02r 2ticipants Yea rs of tenure Account Balances Tend to Increase with Age and Tenure Bass 2021 but rather, the or data tables in Int types of optio 3% ns p erna resen l Reve ted. Plan S nue Service, ponso Sr Co tatisti un cs o cil o f In f Ame come rica Divisio 2023 n 2 indic 021. ate s that in 2022, the average number fewer tha 2) 40. At 1(k) year inv ? in c5a/ n 5 est -A targ th en 20 e or woul pe d an 2 rce 22061 et dat 022 nual nt of d have , th 7 EBRI/ICI e _Mornin acti e fund typica av ve D allocated erage gstar 401 C p 401 ( la ll _k) y reb n Lifetime n pa (on d k) atabas e rticipants tak a pl of lances an _Alloc t account heir e updates. it 4 ation_Jun s p 01ort e (bal k) balanc an folio On anc y _202 with to av e of erage, be e draw 2_ the to com Re equity consis al at cons e l iness ye a given tituti ar funds tent fo -en cus on_Summary gr d 2022, a , ta y ed oup was ear, w rget date on gro ith fe b out 7 $ wth .153 pd fwe u f.a nds ,680 0 perce 4% nd mo r than , n , more t on-targ 2 p re nt of focus erhce an et e nt d date tw on ice 1 5% 2 3 4 Bene(fit Res Septemb earer) ch In . Av stitut ailab ele ( at EBRI) www.i . Thci.or anks g/file to Adam Bens s/2021/perimhon, EBRI 27-08.pdf. Director, Data Compliance and IT and Kyle 7% 100 T po etra cle cn otn trM ibo ut vio ed ns awaT yo ftra o l m be 1 n0 e0 fi ts d R is eb m ua rs in ee dd at 100 o M th o ev re id te t m os 100 Assets at1 y0 e0 a rp -e en rc dent Figure 2 >30 Percent change in average 401(k) plan account baF lain g ce u re am A o7 ng consistent 401(k) participants by age and tenure 10% Asset Allocations, 201 19 6–2022 9% 9% of investmen Evidence of t fun Real d opti loca ons av tion Act ailable f ivi or parti ty to or cipan from t contributio Target ns was Date Fu 21 ands Am mong the more tha ong Consi n 687 ste nt 4 plans su 01(k) rvey ed. Fi gure 5, Younger Participan ts Ten Ad veto ra Have Larg ge 401(k) per S lan ahar ccoes Allocate unt balance d fot ro Equi consistti ees nt ................................ 401(k) ................ 11 the bal tak anc ing aver ed hardshi age cons fu inc nds aist om cco p , or company ent w e unt balanc ithd as 401(k) irtawals. appr pe artic oaches sto of Data ck $ ip70 a . Analyzi and nts f ,3rom 20 ’ as pa a t smo s h ng ets se es the t ng w EBRI he grou er partici e/ICI i targ nves p of consis 4 peants 0 t d te 1( d ate k i) in n data of tehe ent qu tent the base ities fund, whi 40 ire — 1 ind thro (EBR k) icat p u I/ICI a gh e ch i rticip that eq 401( s u usually inc ants 1 ity f 5 kp at )unds ercent data year , the lu base. T of -deed nd 401( e qu in 2022 hity te k he fun )m por , t pl ed an he data tion of ia d’s n 4 n0ame. 1( k) 12 Bedu, R 2000 esearch Associate, $169 EBRI, for their proc $172 essing of the data. This Is -s $ue 79 Brief was written with $1,73 as 8sistance from Age in 2016 percent by 2022 percent percent by 2022 Net change in 2022 Consistent 401(k) plan participants holding equities At year-end 2022, 59 percent of non–target date balanced fund assets were assumed to be invested in equities (see > 20 to 30 Consistent 401(k) Participants Accumulate Significant Account Balances August 27, 2024 • No. 617 Domestic Stock and Bond Market Total Return Indexes 19% Plan Sponsor Council of America. 2023. pa6 rt6th icipaAn nts nual by se Sur lectvey ed of age Profit and te Sharin nure, ye g aa r-nd en d401(k) Plans: Reflecting 2022 P 28lan BrightScope an 2001 d Investment C 174 ompany Institute 2024 147 reports an average of 28 inv -11 estmen 9 t options in 2021 1, and a ,701 n average of Brig Part ht ici Scope pants and Investment Company Institute. 2024. The BrightScope/ICI Defined Contribution Plan Profile: A Close pl s partici how an account that 20s pan ? target ts 2.0 Non in bal p pe -date targ la anc rce ns off 6 f et e nt, on 1u .amo 5 date bala nd erin s n , the ng g e lt, mov th oans equit e nced cons had ed y p fun -ist 6 awa l ort .oa e 5 ds i nt p ion ns outs y from a nclu of art no de icip tandi ass n a ze – nts targ ro et all n w g eq et at as 5 ocat uiti year 5 dat $68,08 .0 es alloc ie on or hy -ba enlance 0 d a at year 20 tion bri 2 d fu 2— d f , with 7.2 -nd und en 3s . d 2 , or com pe the s2 , i rc 02 n younges ent 2 a, dd mo pa of it thi iny sto re on to l - tha t3 s .an 3 gro ck n d ifesty old up four . You had est le times ng — fun 5 n 8 er thos o .2 ds. 401 the eqe u i ities at ( n k) the Institute’s research and editorial staffs. Any views expressed in this report are those of the 18% author and should By Sarah Holden, ICI; Steven Bass, ICI; and Craig Copeland, EBRI > Inv 10estmen to 20 t Compan Ye y I ar-nstitute, Q end 2016 uarterly Supplementary Data). The allocation to equities in target date funds varies with the Fi gure 6, Consistent 401(k) Participants' Investment in Equities and Target Date Funds ...................................... 13 Changes in Consistent 401(k) Participants’ Account Balances 2002 182 147 24% -203 1,565 Experience. Chicago: Plan Sponsor Council of America. 20 investment options when a 28% target date fund suite is counted as a single investment option. Compound annual 30s Look at 401(k 51.2 ) Plans, 2021. San -6.1Diego, CA: BrightSco 45.1 pe, and Washingt 5.on, DC: 3 Inves-t0 ment Com .8 pan 50.y Inst 4 itute. 89.6% median • year their Com -en twen accou d 20 partici pan ties 16, y st nt b (pan an 6oc pad k is equity i ts erc lance te 5. ent 2nd of pe and to rc $1 h ent n s ave 5, ixti t331 ha he 401(k) h es d no i g for (her 12 part eq p con ercent pla uities at icip centrat n’ants s) sponso — year less i ions in n t lik he -end r ely to ( e e the ntire q 2022 uitie em have EBRI s pl ( than Fi oy gl/ICI 40 er oans ure ol ). 7 de outst ).r1( T 401( h k) is n and da ket cha ) itabas ng partici than e. ng pa et re hos nts fl.e in th ects 3.5 eir pth erce irties nt , >5 tonot be asc 10 ribed to the off8ic 7e .8rs %, trustees, or other sponsors of EBRI, Employee Benefit Research Institute-Education As with equities, movem Year-end ent 20 i 2n 2 the concentration of target date funds in 401(k) participants’ accounts results from funds’ target dates. For target date funds, investors were assumed to be in a fund whose target date was nearest to their 12003 186 141 300 1,932 EBRI/ICI 401(k) database Month-end level average growth Years of tenure 80.9% 40s 20 36.1 -4.2 31.9 5.7 1.5 37.6 What Does Consistent Participation in 401(k) Plans Available at www.ici.org/files/2024/24-ppr-dcplan-profile-401k.pdf. > forties Fi mo • 28 2g ture 7, ving from oMoney f 5, or Cfif han und t zero ies. ge ss c equiti i In ons n All th ist e dat ocat es to of those ion to Eq at abase, a leas fun t so uities p ds art me de i cipan s , Am igne 1.5 ong t’s d percent accou to ma Consis intain mo nt b tent 401 ving from a lance a stable (k) is P s r share a ed om rticipants uc e ed to p i ric zero, a n e. ................................ the year that nd 3.7 pe the rcent lo stick an ............... is ori ing wi ginat th zero ed 14, 2004 204 167 204 2,193 and Research Fund (EBRI-ERF), or their staffs. Neither EBRI nor EBRI-ERF lobbies or takes positions on specific chang 65th Lifes birthday es in tyle fund ass . All et valu s mainta ocation to es,in a pr in e a quities i dd edetermined risk ition n ta to rget date f reallocat level and ion unds activ is assu ge ity b nera y mpartici ed to var lly use wo pants y with investor age. Th rds su . Although i ch as “co nformat nservative, e eq ion on ” “mo uity porti speci derate,” o fic on was tradi r ng 480 22% Ag Fact e groor ups T In e> n fluenci 5 to 10 ure (yeang Ch rs) 2016–2017 anges in Co 2017–2018 nsistent 2018–2019 Participa 2019–2020 nts’ Account B 2020–2021 alan 2021–2022 ces 2016–2022 71.0% rate, 2016–2022 S&P 500. New York: Standard & Poor’s. Consistent sample 69.7% 69.5% 50s 30.0 -3.6 26.4 4.9 1.3 31.3 • Consistent 401(k) participants’ 29 exposure to equities wa30 s relatively unchanged between year-end 0 to 2 2005 223 189 146 2,393 39% 23 hold bu Introduction • t rin Stable ep gs i aym n both 2 valu ent of e p01 t roducts he loan 6 and , such 2 in 02 the 2. as ensu GICs ing years and o contri ther stab 20%butes to acco le value fun unt ds, gro are wth. reporte d as one category. Gener policy proposa ate? Chang ls. EBRI invites comm es ient n 401(k) on this research. Plan Acco unt Balances and “aggress activ estimated us ity of 40 ive” in their na in 1g the (k) partic industry 98.2% me to i ipants av ndicate the i erage s not avai eq 97.8% uity percen fun labld’s e i risk level. n ttage f he EBR or Lifes I/ICI 40 the a tyle fu ssigned t 1(k nd ) s g databas arget da enerally are inc e,te fun it isd, w poss luded in the hich was calculated us ible to obs noerve activity n–target da ingte the away 96.3% $166,360 20s >10 to 20 All 124.5% 42.1% 73.4% 45.6% 35.1% -1.0% 976.5% 48.6% 95.3% 401(k) 94 .8% participant analysis 94.8% 440 Fi gure 8, Changes in Allocat 22% ion to 94.5%Target Date Funds Among Consistent 401(k) Participants 92.3% ............................... 92.8% 16 Aver 60s age 2006 30.6 251 -3.7 93.6% 228 26.9 57.7%303 4.2 0.5 2,773 31.1 Clark, Jeffrey W. 2024. How America Saves 2024. Valley Forge93.2% , PA: The Vanguard Group, Vanguard Center for In any given year, the change in a participant’s account balance is a combination 91.8% of three factors: 2016 and year-end 2022. At year-end 2016, 92.8 percent of consistent 401(k) plan participants held some • The other category is the residual for other investments, such as real estate funds. $153,680 The EBRI Morningstar balanced fund /ICI 401 Lifca ecycle Al tegory. (k) dlo at cat aba ion se, w Indhic exes (see h is co Morningsta nstructed fro r 2 m the 022). ad ministrative records of 401(k) plans, represents a large from or to US Departmen 100 >20 to 30 p t of erc La ent bor, Em or zero target ployee B date enefits fun Se dcurity holdi Adm ngs at year inistrat-ion. end. 2A 02 mo 3.ng Private consis Ptent 401 ension P(lan k) p B arti ulletin, cipan Ab ts s be tra twe ct of en 2007 273 261 215 2,975 Asset Allocations, 2016–2022 All 35.5 -4.2 31.3 $144,5 51 .0 6 0.8 36.3 400 Retirement Research. Available at https://institutional.vanguard.com/content/dam/inst/iig- Over this Sugeq ges pe uiti ri te od, es d C (the eq itat uit consis io y fu n:n tHo ds, tar ent lden, Sar partici get d pan ah, St ate ts funds, ’ ag even Bass grenon gate a –, an tar llocation to ge d Craig Co t date b eq ape lance uities land d fu , i“ ncreas W nd 31hat Do s, or com ed es Cons mod pa est ny sto ly ist , f ent rom ckPa ). 65 rticipation This .2 w peas rce l i ittl nt of n e 24% Figure A1, Consistent Sample Was Older Than Participants in the EBRI/ICI 401(k) Database at Year-End 2022 .... 17 • The final cat 2008 >30 egory, unk 285 nown, consists of fund 233 s that could not be identifie -7d. 70 2,203 30s All 46.2 14.3 51.0 31.7 25.6 -4.4 299.3 26.0 cro year ss - section, end 2016 and or snapsho year-en t, o d f 2022 401(k) , fe p w lans at th moved to, e e or nd of awa each y from, th year. It ese isextremes a cross secti of ta on of rget date the e f ntir und hold e popu ing lats ion . of 2021 Form 5500 Annual Reports (Version 1.0) 21% . Washington, DC: US Department of Labor, Employee Benefits 29 13 • new contributions by the participant (+), the employer (+), or both; Fo GICs are insurance company pro r a description of the investment opti ducts tha ons, t gua see pa rantee ge 16 a sp . ecific rate of return on the invested capital over the life of the 360 transformation/insights/pdf/2024/has/how_america_saves_report_2024.pdf. 401(40 k) plan as 1(k chang ) P 2009 las ns ed ets at G at enerate? ye year ar-en 20% -256 e Changes d 20 nd 2016 22, with 94. to in 40 69.5 1(k 8 perc p)ercent Plan 206 ent at Acc of y o $ consis ear u 1nt Bal 19-,e 7nd 4te 1ances a 2022 nt 401 (n ( Fi k) d gu As pl r431 e a sn et All A4 p)artic . O ocat ver the ipions, ants ho same t 20ld 16 in–g 2 ime perio 20 e ,7 22 qu 18,it” ies EBRI . d, Iss their ue By Sarah Holden, ICI; Steven Bass, ICI; and Craig Copeland, EBRI All >5 to 10 71.4 23.2 58.2 37.4 29.6 -3.8 472.4 33.7 401(k) plan participants, and it represents a wide ra Changes in ng ze er o of apa lloc rticip ation ants to t— arinclu get dd aing th te funos dse who are young and individuals Security Administration (September). Available at • total investment return on account balances (±), which depends on the performance of financial markets and Fi cog ntract. ure A2, Co 2010 nsistent Sample Had 265 Longer Tenure Than 243 Participants in the EBRI 337/ICI 401(k) Database 3,at 11 9 320 allocation to 14 Brief, no. t arget date 617, and ICI fun R ds ese also arch P incrers eape sed cti , f ve rom , vo 3l. 0.4 30 F , pe ig no u rcre . ent 7 7(Au of gu ags gregat t 2024 e 40 ). 1(k) plan assets to 35.2 percent. >10 to 20 32.4 8.7 45.2 26.8 21.4 -4.7 206.6 20.5 34% A subst See Ho antial lden, B share ass, and Copel of consistent 401 and 2024 (k) . participants had their entire 401(k) balances invested in target date funds, and Participants in their tweM no tiv ee sd away from zero Moved to zero by who are new to their jobs, as well as older participants and those who have been with their current employers for many ww 2011 w.dol.gov/sites/dolg 283 ov/files/EBSA/resea 250rchers/statistics/retirement -1-bulletins/private-pension 3,112-plan-bulletins- Federal Year-En R d 20 eser 22 ve Eco ................................ nomic Data (FRED) ................................ . St. Louis: Federal R ................................ eserve Bank of St. Lo................................ uis. .............. 18 • on the Consiste allocat nt 4ion of 01(k) part assetsicipants i in an individua ncrea l’s sed thei account; a r ex nposure to d target date funds betw 24% een year-end $90,202 22% $87,191 30 Changes in Allocation to Equities Among C $o 87 n ,0 s4 is 0tent 401(k) Participants 18% $85,500 280 $75,3A 58 ge Zero in 2016 by 2022 Remained at zero 2022 Net change Zero in 2022 Appen som Other stable e 4 net dix mov ement value funds inc toward that lude sy fullnth conc etic entration GICs, whic occu h co rred bet nsist of a portfol ween year io -of fixed end 2016 and -income securiti year-enes d 2022 “wrappe . Anal d” wi yzith a ng t he 2012 303 282 357 3,495 $78,267 $81,140 years 15 . Participants in the consistent sample are both older and longer tenured than participants in the overall database Thi s paper abstr pro act vides an -2021. upda pdf. te of a longitudinal analysis of 401(k) plan particF ip ig ants ure drawn A4 from the EBRI/ICI 401(k) $100,000 See Holden, Schrass, and Chism 2023 $73,6 . 72 • withdrawals (-), borrowing (-), and loan repayments (+). $70,320 Co$ pyright I 7 20 0,6 16 64 and nfor ye ma ar-ti end on: 20 This re 22. At y port is c ear-end opyright 2016, 55.3 ed by the percent o Employee f cons Bene istent 401 fit Resear (k)ch In participants stitute (EBRI) held at . You leas may t 40s All Percent2 a8 g.e 3 of consist 5e .2 nt 401(k) p 3a 9r.t1 icipants b2 y 3a .9 ge, year-e 1n 8d .4 2016 and - 7 ye .0ar-end 21 05 26 2.2 17.0 20s 32.3 -5.8 Figu 26 re .5 1 3.2 -2.6 29.7 2013 325 326 645 4,148 240 Fi gua gure rantee (typi A3, 401call (k) P y by lan an Accou insunt Bal rance co ances A mpany mo or a ban ng Consis k) to tent 401 provide benef (k) Parit paymen ticipants ................................ ts according to the plan a ................. t book val ue. 18 group of consistent 401(k) participants at year-end 2022, the data 1 show that 0.8 percent, on net, moved 2 to a 100 Holden, Sarah, Steven Bass, and Craig CopeA lan ve d. 20 rage23 A. s“How set Al401(k locati )o Pn lan of Part 401icip (k) aPl nta sn Use Loans Accounts o ver Ti by Pam rti e: ciAn pa nt Age database. by the end T of he the Employee period B ofe analys nefit Ris, esear year ch -end Institute 2022 ( . EB RI) and the Investment Company Institute (ICI) also produce copy, pr som 2014 int, or e >5target to d 1 C 0o ow date f nsinloa ste349 nund in d t4 sa 9 this .m 3 p rep v le est inort ments 1 solely 2.6 iE nB the fR or p I366 /ir IC 4 4 ers 6 I .4 0 40 ona 1( 1(kk) )l ac ancou d 30no .6 nts C ncom o, and that s nsist mer e 2n 5t. cial 0 sa 278 mhare use, ple i p n-i6 ncreas rov .8 idee d Ed that BR to 27 I/4 I60 al C .3 I4 .l4 h 0 perc ,4 00 a 16 rd (k) co ent pies r 2 at 4 year .6etai- n Changes 16 30s in Co 3nsiste 6.5 nt 401(k) -7.6 Participants’ 28.9Asset Allocati 3.9ons -3.7 32.8 20s Distributi 30s on of 401(k) 40s Account Ba 50s lances by Si 60s ze of Ac Ac llo co un n si t st B ea nl tance Memo: $80,000 S&P 500² For statistics indicating the higher propensity of withdrawals among participants in their sixties, see Holden and VanDerhei percent target date fund allocation—35.5 percent of this group at year-end 2016 and 36.3 percent at year-end 2022 3 200 31 Analysis of Loan Activity of Consistent 401(k) Plan Participants, 2016–2020.” ICI Research Perspective 29, no. The chan an annualge cro 2015 ins an s-sy i ectional a ndividu 2016 378 al nalys partic is, w ipant hich c ’s 40 ov d1 ers a(tk) ab 4 plan ac 386 a0 se 1( ik n) 2 pl 0 count 1an 6 partic balanc ipae is nts w i 2022 nfluenc ith-1 a wi ed de by ran the ge ma of dat a gn par ba itse ticipation ude 4 in ,3 s2 7 of 7 02 the 2 expe se t rience. hree Some recordkeepers supplying data were unable to provide complete asset a Percentage of 4 ll0 oc 1(ati k) on detail plan acco on certain poo unt balances led asset classes >10 to 20 26.9 4.3 37.5 23.2 17.3 -sam 7.0 ple 144E .7 BRI/ICI 16.1 Figure 40s A4, Average 4 As 3.s 6et Allocation of- 401 9.1 (k) Plan Accounts 3 b 4.5 y Participant Age3 ................................ .5 -5.6 ................. 38.0 19 any an end 2022. d all copyrig The P n ht eret and ot ce movem ntageher of en pa app t towar rtici licab pantle not d s w tar ith ge ices c acco t date uontai nt fund balned ther an u ces s e inov sp ein, a er eci the fie nd d p you rer aniod ge may c s,occ yea urred ri-te or end a 2qu 0 mo 22 ote ng small p consistent 401 ortions of (k) 2002. In a ddition, nonhardship withdrawals, which are generally limited to employees who are aged 59½ or older, constitute Although annual u 20s pdates of the EBR 30s I/ICI 401(k) data 40sbase provide valu 50s able perspe60s ctives of 401(k) pl Alan l account only held targ 2016 et date funds 399 (Figure 8). This net change r 391 eflects 4.2 percent movin 335 g away from the 10 4,0 74 percent 1 Endn otes 160Median $60,000 ten7, uran e: d EB RI Is sue 7 ye Bri aref s , no. 59 0 (Sept emb 7 ye er) ar. Avai s lab le a t w ww.i 13ci.or yeag rs /f il es/2 023/ pe r29 6- 07 ye 4a .0pdf r1 s(k) and But that factors rel snaps ative hot cannot to the start det ingermine account ba how 401( lance. For k) partici exapa mple, a contri nts’ asset allbu oction ations of change a given dollar over the amo years unt produc . For exam es a l ple, arg er for one or mor >2 e of their cl 0 to 30 ients. The 19.1 final E 2B .6 RI/IC ChaI 401(k) databa nge3 s6 i.n 7 100 perse includ 1 c9 e.n 8t alloes only plans cati1 o3 n. 9 to equif tor w ie -6 s.4hich at least 9 113.2 0 percent o 13 f a .4ll plan 50s 47.7 -9.3 38.4 3.6 -5.7 42.0 Factors Influencing Changes in Consistent 401(k) Participants’ Asset Allocations 3 the re partici port pan provided that ts in all age you gro dups o so . Participa verbatim and w nts in their ith pr tw oper enties had citation. the Any use highestbe uyo se nd of ttar he ge sco t date pe of fu the nd f s i or n both egoing a ma jority o2017 f all withdrawals (se 429 e Clark 42024 01(k)). p lan pa 425 rticipant age 763 5,486 database bal Fi allocation to gure ances, A5, ass 40 set all 1 om (k)ething le P ocat lanion, Contri s a s,nd bu 5.0 ltions o an percent act , Inves ivit mo y acros tm ving ent s to R w eturns a 1 ide00 cro , Be pe ssrc sections nent efitsa Disb llocat of urs p ion, and a ed rticip , and As ants 31.3 , cros s ets perc ................................ sent -section with 100 perc al analyses enar t . e 20 not 100 percent Moved away from 100 Remained at Moved to 100 Net 100 percent 120 www.ebri.org/docs/default -source/pbriefs/ebri_ib_590_k-loans-12sep23.pdf. growth as besets could be i caus 60s e rate of ch when ang dentified. in ag 4 d6de s .6 am d to plea smaller s of providers, acco -7.9 unt plans, tha and n it w pa ould rticipants, 3 if 8. adde 7 c d ha tong a es i large n r 4 as one .3set . allocation On the other Y-e 3a for t .6 r-e n hand he d 20 e1 ntire , i 6nves 43 d .0ata tment base 2018 464 474 -251 5,207 requ $40,000 pe ires EBRI riods but ’s p ex rior perie expres nced s p thermis e smallest sion. n For et c pe hange. rmissio ns, please contact EBRI at permissions@ebri.org. Changes in 401(k) plan asset allocation are determined by three factors: EBRI/ICI 401(k) database wel 1 17 l suite Ad ge to examiniing the n 2016 impact of pe con rcens t ist byent 202partic 2 ipa 10 tion i 0 pern c 401 ent (k) p e pl rans. cent Cross by 202 s 2ections cha change nge in in com 2022position 5allocation to 0s target date All funds i 22.8 n both 201 2.96 and 2022 33.6 . In other 20 w .7ords, 88 14 p.ercent 7 of consis -7.5 tent 1401(k 16.3 ) participan 13ts .7 with Note: The consistent sample is 2.1 million 401(k) plan participants wit Ba h a lan cco ceun d t b fun ala ds nces at the end of each year from 2016 through 2022. Participant tenure Th See Bri e Emplo All ghtS yee co Benef pe an 44 d I it R .7nv esea estment Company Institute 202 rch Institute ( -8.6EBRI) is a nonprofit, 4. 36 nonpa .1 rtisan, publi3 c po .9 licy research -4 orga .7 nization th 40.0at does not returns are not of a r a elia 2019 gibl ven perce e measure ntag o 499 f e ho pro w du ind ce ivilar A dua gg eer d l opart f p oa llar incre icip r 519 tica ipnts ant h asave es ( acte or de d. crA e consis ases) 1,w 0 tent sa 7 hen 4 co mple is mpoun n de ec dess onary a l 6,2 to accur arg 56 er assat etely base. 80 Consistent 401(k) plan participants holding target date funds Figure A6, Most 401(k) Plan Participants Are in Plans with Employer Contributions ............................................. 20 2016 2017 2018 2019 2020 2021 2022 Consistent sample is tenure as of th 20s e year-end indicate 2.7 d. -0.7 2.0 2.3 1.6 4.3 Holden, Sarah >, Steven 5 to 10 Bass,3 an 8.5 d Craig Co 8.2 peland. 2024 38.7. “401(k 2) 6 .Plan 5 Asset All 21.5 ocation-, Account 7.8 1 Bala 94.4 nces, and Loa 19.n 7 their 40 from year $20,000 1( to y k) 2020 acco ear becaus unts fully e t 517 inves he sel ted in ection tar of ge dt ata date p615 rov fund ide sr at s an year d sample -end 2 01 of 6 p were lans usin 900fully g a g inves ive te n prov d in ta ider var rget date 7,033y a f nd b unds e at cause Figure A1 lo bby or take positions on legislative proposals. In gau other gRepo •e change w Most con rt or A ds s v , g , such as i airowth la sist bilit ent 40 rate y: n Thi esxp are s 1( os rep k) pa ure a f ort u to eq nctio irt s availa icipants uities or n of the ble on who rel targ ati th wer ee ve size t d inte ate e f rnet at fund of ull the y inv u w s doll e, f ww.e este ar orbri.org i d adjus nidi n tar vid tm u get d al ent 401(k) to t athe e f p size la und n partici of s t at he ind ye pan arts ivid -end ov ual er 18 ICE BofA US 40 • gains or losses on the investments held in the 401(k) plan account, 2, 3 Data from the ICI Survey of Defined Contribution Plan Recordkeepers find that DC plan participants generally stay the 30s 3.5 -1 T.a 2rget date 2.3 3.0 1.8 5.3 Company Source: Tabulations 2021 1 from EBRI/ICI Part 582 icipant-Directed 5 Retiremen 680 t Plan Data Collection Project 1,068 7,899 Note: A target date >10 to 20 fund typically reb 24.7 alances its portfo 3.1 lio to becom 33.1 No e less focused n–2 ta 1r.g 3et dat on growth an e 16.0 d more focused o -8.0 Money1 n incom 21G .7ICs e as it and ot1 h4 e.r2 4 40 1.1 7( % k) pa Act rticip ivity Equities include equity ants in join 2022or .” Ile CI R ave p funds, com esear lans. ch P pany stock, the equity porti In ers add peitio ctivn, e 30 the , n ao. nalys 3, a on of target date funds, and the equity portion of is cov nd EBRI ers Iss acco ue Brief unt balan , no. ces 606 hel( d in 40 April). Ava 1(k) plans at ilable at Fi year gure C -en oA n d 7, s2022 is Do temes n . t Sa tic Stock mple a Wnd as Bond Olde Mark r Thet T an Pa otarlti Ret cip ur an nts In de inx th ese ................................ EBRI/ICI 401(k) Da................................ tabase at Year-End.... 20 21 22 Corporate Index³ acco time. T unt. his pap er will examine the accounts of consis 1, 2 tent participants, that is, those who maintained accounts in each 2 4 2 2016 remained fully invested in target date funds at year-end 2022. Among consistent 401(k) plan $0 2022 N/A N/A N/A 6,435 Age0 gco r oTh u urse pe In • approaches and pass . During ea ves 40s contr tme ib nt Company utio ch y ns t ear o or withdr es the target date 4from 2016 th .7 Institute ( Equitaw y fICI) urough als from t nof the fund, whic ds is t -1 2022 he lead .5 fun he d , fewer than saing ass cco h is usuall unt oc b in iati a 3 percen y included i la a 3 n d on represen .c 2iefd feren fut o n n the fund’s nam dts f p DC plan ro ting the a porti Bo 2 n .d 5 on than partici fu e. Funds incl sse nds t man pan the ts stopped fuageme ex n1 ude m d.s 0 isting nt utual funds, bank st mi a industry co blntributing to e x v 5 o a .f7 l ua in serv es fsu ets nd, and sic their e of stock Other Unknown Memo: equities non–target date balanc >20 to 30 19ed funds. A .1 target date fund ty 1.7 33.0pically rebalances i 19.1 ts portfoli 12.1o to becom -7e less focus .2 ed on growth 99.5 12.2 Medianwww.ici.org/files/2024/per30-03P .pdf erce a nnd tage w o ww.e f partbri.org icipants /d bocs y ag/d e,ef ye ault ar-e -s nource/ d pbriefs/ebri_ib_606_k-xsec- participants’ current employers. Retirement savings held in plans at previous employers or rolled over into individual For all of the figures 2016 in this rep 2017 ort, components 2018 may not add to th 2019 e totals prese 2020 nted be 2021 cause of round 2022 ing. collective trusts, life insu 2023 rance separate N/A accounts, and any po N/A oled investment product prim N/A arily invested in the security indicate 7,410 d. The De year from c-13 partici D 201 ec-1 6 pan 4throu ts w D gh 2 ho were ec-1 022. 5 ful D ly e inv c-16ested D in etar c-1ge 7 t F date ig D u e f re c- u 1 nd A 83 s at year Dec--1e9nd 201 D6, ec- n 2ear 0 ly 90 D p ec- erc 21ent wer Dee fully c-22 Dec-23 20s 23.5% 61.2% 2.4% 3.7% 0.3% 2.0% 1.0% 2.8% 3.0% 80.4% 50sand more focused o 5.8 n income as it approa -2.1 ches and passes the ta 3.7 rget date of the fund 2.3 , which is usually includ 0.2 ed in the 6.0 401(k) pl individual i • an chang nv ac es co to es to th un rs. ICI’s members ts.70.3% Se ome o assets f th hese pa el incl d inside ude rticipants ma moutu f the al fu ay cco nds, exchan haunt (incl ve stopped co ge ud-ing traded r ntributing becau ebal fuancin nds (E g TFs), and se the cl chan osed y re ge -end sache in fu the dnd the contributi un s, and u derlying nit as on limi set t. >30 15.7 1.5 31.8 17.4 10.1 -5.5 89.0 11.2 Younger age groups in the sample of consistent 401(k) part6icipants, who were much more likely to be fully invested in 67.2% 67.7% retireme consistent sam nt acc 30apr24. ounts pdf ple is 2.1 m ( . I RAs) a illion 401(k) plan pa re not included rticipants with accou in the analysis.nt balances at the end of each year from 2016 through 2022. Age Participants in their forties Changes ifund’s nam n Consi4 e. ste 01(k nt 4 ) Pl 01 an (k) Ac Part coun ici t B pants’ A alances cc A ount B mong alanc Consies ste Bet nt 4 ween 01(k) 20 Pa16 rtic and 20 ipants 22 30s 32.1 50.7 2.6 4.5 0.5 2.5 2.0 3.2 1.8 80.5 60s invested in targe 4.9 t date 63 f .5% unds at year -1.8-end 2022. This hi 3.1gh level of pers 1.ist 8 ence in target 0.0 date fund 4 i .9nvesting was investmen See Holden, Schra 1 t trusts (U ss, and C ITs) in th hism 2023 e United States for DC , and UCITS plan partic62.0% ipant and simi s’ ann lar fu ual acti nds viti offered to investors in ot es between 2008 and 2her j 022. urisdict For anio an ns. IC alysis I also of allocation of funds, such as target date funds). 60.0% Annual pegroup is based rcentage chaon the partici nge in totapant' l rets age at year- urn index end 2022. target date Total contribution funds in bot s include both h years, had employer and em some net movem ployee contribu ent away tions. from full allocations to target 57.0% date funds between year- $500,000 56.4% 58.0% 2 Key Fin Age of pa dings rticipa :n t 40s Table of Contents4 1 .1 36.8 2.9 6.2 0.7 55.3% 4.0 2.8 3.6 1.8 76.2 Average 401(k) plan account balance for consistent 401(k) participants by age and tenure, year-end All Asset allocation b 4.9y age group is among the co -1.7 nsistent sample of 2.1 3.2 million 401(k) plan pa 2.4 rticipants with accou 0.7 nt 5.6 observ 2 ed across all participant age groups. 53.4% 60s All 20.1 2.1 27.1 152.3% 7.5 11.7 -8.5 87.2 11.0 Altogethe represe contributio nts its members in r, fro n activi m year ty du-ring th end 2 their capacity as inv 01 e bea 6 throu r mark gh year et of 2000 estmen -end –2002 2022 t adv,using th isers to the avera certain co e cro gess 4 -01 sectio ll(ec k)ti na pl ve inv an l EBR acc estmen I/ICI 401( ount balanc t trusts (CITs) and k) databa e amo ses, see Hol ng the gr retailoup den of Total benefits disbursed include both benefits paid directly from trust funds and premium payments made by plans to insurance Ho lden, Sarah, Daniel Schrass, and Elena Barone Chism. 2023. “Defined Contribution Plan Participants’ Activities, 2022.” To end 2016 explor and e theyear full -im en pact o d 2022 f o . ng Older oing partic investors ipation on th in e 4 oth 01e (r h k) p an lans a d had nd t som o unders e net move tandment tow how 401( ard k) pla a fn ull pa alrticip locatio ant n sto have 50s S Source: T &P 500²abulations from EBRI/ICI 4 Participant-D 4.3 irected Retir 28.6 ement Plan Data Collecti 3.3 on Project 7.9 0.9 6.1 3.3 3.8 1.8 68.1 Introduction balances at the end of ................................ each year fr ................................ om 2016 through 2022. A ................................ ge group is based on the partici ................................ pant's age at year-end 2022. ....................... 5 Between year carriers. A >-5 end 2016 tm oounts ex 10 and clude bene 3year 0.9 fits paid directly by in -end 2022 5.6 , stock surance carriers. market 31.8 s gen 21 erally .9 appreciat 17.7 ed mor -8 e .7than bo1 nd 38.mark 7 ets (Figur 15e .6A7). $400,000 sepa and VanDe rately ma rhei naged 2004. Th accounts e analysis f (SMAs inds tha ). ICI has o t, overall ffices in Wash , 401(k) partic ingtoipants’ n DC, Brussels, and L contribution rates were li ondon and ca ttle cha rries out its i nged in 2000, nternatio 2001, nal cons 60sistent participants more than 7% doubled (increasing by 118 percent; Figure 4), rising from $70,664 at year-end 2016 3 60s fared over ICI Re an exten search ded peri Report od, (Marc it i 3s 9 i h .2mpo ). Availa rtant to a bl2 e8 at .0 nalyze www.ici.org a cons /f 3 ist i.l6es/20 ent gro 23/2 up2 o -r f partici p 1t0-.recs 3 pan urvey ts 1 q (.4. a l 2 pd ong f. it udina9 l .s 3ample) who 3.0 3.9 1.6 57.3 target This paper date f pro T uhe year-end 2 nd vides an s. For exam upda 022 EBRI pl te of e, /I 61 a CI 401(k) datab .5 lo ng peit rcuent dinal ase represents of an consis alysis te 11% nt 401 of 12.3 m 401(k) (illion 401(k) plan pa k) p pla arti n p cipan articts ip in th ants rticipants. drawn eir twenties from t had he EBRI/I 100 perc CI ent 401o (f k)the ir Age grou 3 p Tenure (years) 2016 2017 2018 2019 2020 2021 2022 ICE BofA US Corporate Index³ Changes in zero allocation to equities 14% >10 to 20 22.6 2.7 27.9 18.8 13.9 -9.0 98.3 12.1 This category includes interest, dividends, rent, net gains or losses on sale of assets, unrealized appreciation or depreciation of All Sample else equal, of Con 5 this wou sistent ld401(k have )ten Participa ded tonts increas , 2016 e –th 202 e pro 2 ................................ portion of 401(k) pla................................ n assets invested in equities. ....................... However, 5 wo and 2002 rk through ICI Glo when compared to 1999. On av bal. erage, 401(k) participants’ contribution behavior does not appear to have been to $153,680 at year-end 2022 (Figures 2 and A3). This translates into a compound annual average growth rate of 13.8 21% All consi50s stent sample 40.9 30.4 3.4 8.6 1.0 7.2 3.0 3.9 1.7 65.2 40.0% database. have account beeinves n par ted in t of the data target date f base for undan ext s at yea end r-e ed per nd 2016, iod. This compare paper d wit pro h vides an 58.2 pe an rcent alys at is of year $7the 1- ,1 e9 acco nd 4 202 unt balanc 2 (Figurees o 8). f 2.1 20s Note: Funds inclu All de mutual fu Mov nds, ban e$ d3 a ,0 w 6a 7 k collective t y from $ ze 6,r8 rusts, life in o 8 5 Remaisurance se $ n9 e,d 7 8 a4 t M parate a ov $e 1d 6 ,t ccounts, a 9 o6 ze 7 ro bnd any p y $ 24,69N 8 ooled inv et $3 estm 3,35 ent 6 $33,017 $300,000 assets, and other income and expenses. The bulk of this category is net investment gains or losses. >20 to 30 18.2 1.3 26.8 16.7 10.3 -8.8 78.3 $68,08 10 0.1 21.9% allocation to equities only 6 increased modestly over the period 31. ( 5% 65.2 percent at year-end 2016 and 69.5 percent at year- materially affected by the bear market in equities from 2000 through 2002, whether measured in dollar amounts or Holden, Sarah, and Jack VanDerhei. 2002. “Can 401(k) Accumulations Generate Significant Income for Future percent over 4 product pri the six- m year arily i pe nvested in the s riod (Figurecurity i e 4). T ndicated. Perc he median entages are doll account balan ar-weight ce amon $59,5 ed averages. 69 g this cons See Figure A istent group 4 for also grew, more 2016 E 3BRI/ICI 401(k) database 40 1(k) PA lag n eParticipants Zero Ca in 2n 01Acc 6 umu 43.5late by Sizable Acco 2022 21.3 unt Balze ances ro 6.1 ................................ 2022 8.2 28.7% ................................ c3 h.a 1nge Zero i5 n. 8 2022........ 5 5.9 5.1 0.9 67.4 million coEstim nsistent ates throug partici h 2021 a pants re based on in the EB the Departm RI/ICI 401 ent of La (k) dbor Form atabase over 5500 Resea the rch File. six-year period from year-end 2016 through C ons S 40s ee Ho istent lden, B 401( ass k) part , and Copel icipants an id 2024 n their . forti es were the most likely to move to a 100 percent concentration to target >30 15.2 1.1 24.6 14.8 7.5 -7.3 66.0 8.8 26.3% 30.0% additional detail. 29% $47,865 Abo end percenta 2022 ut the ge of ) (Figu salary EBRI/ICI 401 re A4 they ). W co hile it ntributed. is not (k ) poss Database ible to directly observe the impact of each of these factors inside the $200,000 than tripl 20s Retirees? Note: Da ing from ta ex ” $21,94 clude p Invest 4lans cov .5 7 ment Com in 20 ering on 16 to pany Institut ly one $68,-participa 08 3.30 in e nt. 2 P 02 ers 2 pe (a compou ctive 1 .8, 4 no. 3 nd an , nual and av EB 0erag .RI 4 Ise growth sue Brie-f rate 2 , n .9o. of 25 20 1 (.Nov 81 pe .8ember rcent)) . Because the annual cross sections cover participants wit 25% h a wide range of participation experience in 401(k) plans, 30s All 21 17 .8 ,1 % 38 25,048 28,638 43,248 56,967 71,5 16 76 .3% 68,439 date fun year-end ds: 2022 36..1 percent of consistent 401(k) participants in their forties had 100 percent of their acco 23% unt invested in 30s Changes 4 in Consistent 401(k) Participants’ Account Balances ................................................................................. 9 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collecti 18.4% on Project For example, N/A = not available at year-end 2022, 15 percent $33of 401(k) parti ,479 cipants in the EBRI/ICI 401(k) database were in their twenties, EBRI/ICI 401(k) database, it is possible to observe whether participants entered or exited an asset class entirely over 30s 5.5 -3.8 1.7 0.5 -3.3 2.2 20.0% Available at www.i $29,9 ci.or 79 g/pdf/per08-03.pdf and www.ebri.org/docs/default-source/ebri Ye- aiss r-eue nd- brief/ 2022 1102ib.pdf. ( meanin 19 Figure gf 2)u. l analysis of >5 tth o e p 10 otential for 10,401(k 257 ) part 17ici ,5pan 82 ts to accumul 21,659 ate retir 34,26 ement 8 as 4s 7ets ,09 must e 6 6 xamine 1,023 the 40 58,1( 71k2) All All 23.4 3.5 32.7 20.7 15.1 -7.6 117.5 13.8 S 1ee Ho 3.7% lden, Schrass, and Chism 2023. target date 13 f.u 5nd % s at year-end 2016, compared with 37.6 percent 14.at ye 2% ar-end 2022. $100,000 $2 Sources: I 1,945 nvestment Com 12.pany I 0% nstitute and Department of Labor 20s 11.4% The EBRI/ICI project is unique because of its inclusion of data provided by a wide variety of plan recordkeepers, while 14 percent were in their sixties (Figure A1); 24 percent of participants had two or fewer years of tenure at their current 40s 6.4 -3.7 Balanced fu 2n .7 ds 1.0 $18,827 -2.7 3.7 the Factors period Influe analyzed ncing Cha . nges in Consistent Participants’ Account Balances .......................................................... 9 $16,836 $17> ,1 13 02 to 20 26,726 3 $5 1,7 3,9 57 87 38,48$ 617,9615 95 .8 ,9 % 00 70,868 86,008 81,954 $16,010 $15,331 plan accounts of participants who maintained accounts over all of the years being studied (consistent participants). For Sampl 11.0 e of C % onsistent 401(k) Participants, 2016–2022 33% 8.4% 7.5% 20s 30s 40s 50s 60s All 10.0% 6.5% 20 6.0% permitting the analysis of the activity of participants in 401(k) plans of varying sizes—from very large corporations to jo bs, See Ho whil 50s e 4 p lden, B ercent h ass, and Copel ad mor 6.8 e tha and n 3 2024 0 yea . Fo r-s of tenu 3 r an .2 analre (F ysis of igure A2). 401(k) partic 3.6 ipant loan 1.6 activity over -time, 1.6 see Hol5 den, Bass .2 , and Am Hold ong en, Sarah the consis , and Jack 9.1% tent gro Van up,Derhe individ i. u2al 40 004. 1( “Contri k) part bu ici tion pan ts Behavior experie of nced 401(k a wide ra ) Plan Par ngeti cipan of outco ts Durin mes, goften infl Bull and Bear uenced by Note: Age and tenure groups are based on participant age and tenure at year-end 2022. The all category includes participants with missing tenure $0 8.8% 1.4% example, Fewer co nsis beca tent use of 401(k) changin participants g samples of had none providers, of their 401 pla Fns, igu ( an k) re b d A p a 6lanc artici es invest pants, cha ed nge in target date s in account b fund alances s at year for th -end e 2 ent 022 ire 8.2% 401(k) plan participant age 8.1% 1.5% Changes in Consis 7tent 401 .8% (k) Participants’ Account Balances Between 2016 and 2022 ................................ 2, 3 ........ 9 7.1% Target date Company Background on Factors Influencing 401(k) Plan Account Balances Among the 401(k) participants with accounts at the end of 201 Non–ta 6 rg in etth da et EBRI/I e CI 401(k) dM ata onbase, ey G 2.1 ICs mi lli an on d are othe i r n the inform To ation. A gain insig 60s ccount balan ht into 2016 ces are participan partici 8.2pant behavior 2017 t account b , c-hanges 3 alances held .0 2018 in al in 401(k) plans a location to 5 2019 .2 eq t the participa uities overall 2020 2 nts' .5— current em and to ta ployers and a 2021 -rget 0.5 date re net of p fund 7 2022 .7 s, in lan loans. Co small peland 2 busin023 ess.es —with a variety of investment options. 40s Markets.” National All Tax Association P 49,3406.0 roc % ee 6di 3,ng 318 s, Ninety 66-,Sixth 626 Annu 92 a,l 6C 7onfere 9 nce 114 on Taxation, ,804 135,8 November 93 126 13 ,38– 8 0.0%the relationship among contributions, investment returns, and withdrawal or loan activity. Participants23% who were 5 25% Most 401(k) Plan Participan 1, ts 2 Are in Plans with Employer Contributions 2 4 5.3% 5.1% database than Because of th at year are - enot a nd ese ch 2016. A relia anges in blnal e meas yzing the the cross secti ure o g f ro houw p ons, in ofdi consis co vidu mparing a alten part t 4icip 0vera 1(ants k)ge accou partic have ipfar nt ba ants ed at lances a . A year cons -cr end ist oss di ent 2022 sff ample eren , the t ye i d s n ata arec -end show esscro ary th ss to - at 4.7 30% Age group 7 Equity funds funds balanc 4e .3 d% funds Bond funds funds stable value funds stock Other Unknown Memo: equities Retirement savings h 2016 eld in plans a 2017 t previous employers or rolled ove 2018 r into I 2019 RAs are not includ 2020 ed. 2021 2022 3.9% 3.8% cons istent Allsample. The7 s.e 2 consistent parti-cipan 3.5 ts had accounts 3.7 at the end of each 1.5 year from -2 201 .0 6 throu5 gh .2 2022; they Backgroun Participad nto sn inFactors their si In xtie flu sencing 401(k) Plan Account Balances ................................ 3.3% ................................... 11 particular—are exami -0.> 65 % ne to d. Fo 10 r the mos 23 t p ,9ar 39t, there 3 were 5,748 relatively sm 40,242 all changes 58,903 in co -1.nsis 7 06 % ,9tent 401 39 (9 k6 ), 1 pl 6an 9 parti8 cip 9,5 ants 97 ’ Aggregate data on 401(k) plans provide insight into the possible influence of each of the facto 2.rs 9% that cause changes in younger or ha 15, 2003, C d fewer years hicago: 4 of 4– ten 53ure . W e asxhin perience gton, DC: d 3.th 1-% 2e National .2lar %gest perc Tax As ent incr sociatio eas nes in . average account balance between 21 Percentage of active 401(k) participants in plans with employer contributions by plan assets, plan year 2.5% -4.4% 20s sectio pe accurat Th rce e In na nt, on ely l snaps ves gau n tme ehots can lead t ge t, mov nt Company chan ed ge awa s, s In y from a uch o false co stitute tracks rea as 29 .growt 1 z nclusio ero htarget in ac ns. Fo ll6 oc 3count .ati 2 date r exam on o f b u f a and ple, lances or cco a newly formed plans llocation unt balan 1.5 changes 2 — ces an .144 %.7 i d cha n pe ass rcen wo 2.nges et al 9u t of ld tend to pull locatio to this g the a 0.ns, ro 3sset a up had ex dow pll erienc oc n n th atio o i 1 ed e av n of nves .4 ber y tage ments in 0.9 0.7 0.1 89.6 1.7% -10.0% 1.5% $450,000 Sources a Note: E nd Type quities s of D include equity ata funds, company stock, the equity portion of target date funds, and the equity portion of non–target Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project make up a longitudinal >10 samp to 20 le, which5 rem 5,333 oves the ef 70,22 fec 0 t of partici 73,27pan 2 ts an 10d pla 0,769ns enterin 124,1g 20 and le1 aving 45,639 the data 135 base. ,407 exposure to equities between year-end 2016 and year-end 2022. Note: Account balances are participant account balances held in 401(k) plans at the participants' current employers and are net of plan loans. account balances: contributions, investment returns, and withdrawal or loan activity. Between year-end 2016 and year- year-end 2016 and year-end 2022. For example, the average account balance of 401(k) participants in their thirties Changes in Consistent 401(k) Participants’ Asset Allocations ................................................................................. 12 30s 200636.3 2007 5 2008 2.9 2009 2010 1.7 2011 2012 4.0 2013 0.3 2.1 1.9 0.8 0.1 87.8 acco contributio unt balan ns fcor a sample of reco e, but would tell us rdke nothing ab epers. Th out co e sur nsistentl vey results indicate a minori y participating workers. Simi ty of DC plan pa larly, the a rtic ggreg ipants chan ate avera ge the ge acco ir ass un et t target indivi$400,000 du date al 401 date balanced funds. A fund (k)s p at lan partici year-en target date fund ty d pan 2016 a ts over nd tim 40. pically e. 0 p ercent rebalances i had ts portfoli no inves o to becom tments e less focus in targeed on growth and m t date funds at ye ore focused on ar-end 2022 (Figure Note: Equities include equity funds, company stock, the equity portion of target date funds, and the equity portion of non–target Retirement savings held in plans a >20 to 3t previous em 0 7 ployers or rolled ove 9,510 94,71r into I 2 RAs are not includ 97,173 1 ed. See Figu 32,813 re A 153 for addition 9,116 -15 1 al detail. .84 1% ,158 169,514 Holden, Sarah, Jack VanDerhei, and Steven Bass. 2021. “Target Date Funds: Evidence Points to Growing Popularity and -20.0% 2014 2015 2016 2017 2018 2019 27% 2020 2021 end 2021 (the latest data available), contributions to 401(k) plans have averaged $498 billion a year, and benefits paid 40s ros e 299.3incom percent e as it approa (a 26.ches and p 0 percent 4 asses the ta 2 compo .3 und ann rget date o 41.1 ual f the fund average , which is usually includ g 2ro .2wth rate) b ed in the f etwe 6.1en und’s nam the en 0e. Funds includ d .6of 2016 and the e 3.9 end of 2.6 1.1 0.2 80.9 $350,000 date balanced funds. Funds include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled balan allo <$1cati 0,ce wo 00 on in an 0 $ uld tend to be pu 10,y give 000 > n pe $20rio ,00 d. F ll 0ed dow > or ex $30,n if a ample, 000 > la $8.0 4 rge n 0,0 percent of D 0umbe 0 >$5 r of 0,00 partici 0 C plan pa >$6 pan 0,0ts retire and 0rtic 0 ipants changed >$70,000rol >l o $8ver 0,the a 00their acco 0 sset a >-$ 19 80 .1 ,0 ll % un 0 oc 0t balan atio >$1n of the 00,ces to 0 800> ir acco $ ot 20her t 0,0 un 0ax 0 t - 8). This net change reflects 8.6 percent moving from zero target date fund ownership to at least some, 3.9 percent Several EBRI and ICI members provided records on active participants in 401(k) plans for which they kept records for Initiall Factors y, this gr Influe oup was ncing Cha deng mographica es in Consis lly tent similar to t 401(k)he e Partic ntire ipants EBRI/ICI ’ Asset All 401( ocat k) ions data................................ base at year-end 2016. ............... However, by 12 25% mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the Source: T abulations from Appropriate EBRI Use b /ICIy Participant-D 401(k) Plan irected Retir Participem ant ent Plan Data Collecti s.” ICI Research P on Project erspective 27, no. 7, and EBRI Issue Brief, no. 537 50s 43.9 32.8 24% 2.7 8.1 0.9 7.1 3.0 1.3 0.2 69.7 investment product primarily invested in the security indicated. The consistent sample is 2.1 million 401(k) plan participants with (includ $300,000 ing rollto overs) hav to e average to d $542 bito llion (Figuto re A5). Inves to tment retur to ns—int toerest, divi todends, and rea to lized and A 20few 22 ( k Fig ey i ure 4). Beca nsights eme use y roung ge frer om lo partici oking pants at the ’ account 2. b 1 mi alances te llion co nded nsistent to be small participants er (Figures in th 3 and e EB AR 3) I/ , the ICIir 401(k) 24 qua balan lified accounts. ces, and 4.0 percent ch anged the asset allocation of their contributions in 2022 (see Holden, Schrass, and Chism 2023). -30.0% mo year ving from -end 20 security indicated. 16 throu some to gh zero, ye The consistent ar a -end nd 36 2022 .1 sam p.erce ple is 2.1 m Th nt with ese pl illion 401(k) plan pa a z n ero reco ho rdld keepers ings i rticipants with accou n b incl oth ude mutua 2016 an nt balances d l 2022 fund compan . at the en d of each ies, banks year from , insuranc e 50s All 87,023 106,863 109,943 146,928 177,286 203,412 188,192 year -end 2022, these participants 24% had grown older, accrued longer job tenures, and accumulated larger account account balances at the end of each year from 2016 through 2022. Age group is based on the participant's age at year-end 60s Changes $20 in Co ,000 nsiste $30,000 nt 40 $40 3,8 0.0 21(k) 0 $50Parti ,0030 0.8 ci $60 pants’ ,000 $7All 03 ,0 .4 0oc 0 atio $80,0ns to 00 10 $.9 4 Eq 0,000 uit $ies 1 10 .3 0,0 00 $200,1 01 0.0 6 2.7 1.3 0.3 57.7 (September). Available at www.ici.org/files/2021/per27-07.pdf and www.ebri.org/docs/default-source/ebri- Changes in Consistent 401(k) Participants’ Allocations to Equities .......................................................................... 12 $250,000 969696969696969696 unrealized asset appreciation/depreciation—vary significantly from yea 95r to year. 95 For example, they provided a contrib 2014 utions produ 2015 ced sign2016 ificant perc2017 entage growt 2018 h in their 94 2019 account 95 bal 2020 ances. 2021 2022 2023 Compound database 2016 through 2022. A over the six-ye ge group is based ar p94 eriod fro on the partici m year-pant' end s age at year- 2016 to 94 year end 2022. 94 -end 2022. 93 93 5 >5 to 10 39,528 92 54,730 59,198 82,098 103,829 126,202 116,379 Investment 2022. returns, which vary 9291 with 401(k) pl 92 an 92 account 929292 asset allocation, also influence the changes in participants’ com 6 22 panies, and consulting firms. Althoug 91 h 91 the 91 EBRI/ICI 401(k) project has collected data from 1996 through 2022, the balances compared with participants in 90 the year-end 2022 cross section. At year-end 2016, the median participa 9090 nt i 91n 91 All consistent sample 41.1 89 35.2 2.9 8.1 0.9 89 7.6 8989 91 2.7 1.2 0.2 69.5 Acco For a de unt balan tailed an ces are alysis of 401 net of un (k) paid lo plan pa an b rtic alan ipants’ ces. Si u ze se of ta of 401(rget date f k) plan acun cod us n by t bapartici lancepant age or jo 89b tenure in the year-end 90 $200,000 88 8888 At both year issue -e -nd bri ef 2016 /ebri_i and b_537_ year-401k end 2022 tdfs-9se , more t p21.p han 90 df. percent of consistent 401(k) plan particip 87ants 87 had at leasa t verage 86 significant boost as the stock market rose sharply in 2017, 2019, 2020, and 2021 but had a negativ85 e effect on assets in C onsistent 401(k) participants in all age groups moved, on net, toward target date fund ownership between year-end Evidence of Reallocat >17 0 tion o 2 Act 0 ivity to or fro 75,297 m Equi 93 ti,es Am 909 ong 9Co 6,8nsis 67 tent 4 12 081( ,9k 5) 9 Partic 1ip 56 ants ,459 ............................... 181,505 166, 9 12 67 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project 18% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project uni acco vers unts. e o Alth f daough ta prov ass ide et allo rs varies from cation vari yea ed w r to year. ith age, a In a nd many ddition, partici the pl pans using ants held a a p ra ang rticular e of invest provid ments er can , sto cha ck ng mark e over et 2022 EBRI/ICI 401(k) database the cons $150,000 istent sample was 45 years 37. o 9 ld, the same as 38.0 in the entire 3.0 database. By year 7.4 -end 2022 0.7 , the median partic 8.0 ipant ann ual3 .6 1.1 0.2 71.0 2022 79 cross-sectional EBRI/ICI 401(k) database, see Holden, Bass, and Copeland 2024. Among 401(k) plan participants holding 78 78 15% 77 78 14% 7 In som contr e • exas posur The aver t, the e to avera 76age equge ities, 77 40 acc 1( whe ount balanc k) p th la er th n account ba rou e o gh f ol eq de ur ity f la partici nce fo unds pan , the r con ts, or t equ sistent p ity hos por e w tion of ith arti loci nger t targ pants eenures t d ro ate se funds, t — ebot ach year h ohe f wehom te qu fro ity m year pnded ortion of -to 76 76 2018 and 202 75 2 when the stock market was down. From year-end 2016 through year-end 2021, investment returns This number is lower than >20 to 3 it w 0 oul 10% d ha 12 ve b 3,88 e7 en if it merely ref 147,561 lect 15ed emplo 0,095 yee 19 turn 9,58over a 6 nd re 237,6tirement. 89 2 Fo 66,4 r example, 90 24 if 7, 205 2016 and year 73 74 -end 202274 , with participants in their forties and fifties having the largest ne2% t movement. For example, 72 72 growth rate, perform 71 $100,000 ance tends to have an impact on these balances because, in large part, 401(k) plan participants’ balances Note: T time. Re he consistent cords were sample is 2.1 m encrypteillion 401(k) plan pa d to conceal the rticipants with accou identity of employers nt balances and at the en employ d of each ees, buyear from t were cod 2016 throu ed so that gh 2022. bot T hhe year- could Changes Ho in th lde en, cons Sarah inist Co e, Jack Va nsis nt sample tent 401 nDer ha (k d hei, ) ag Pa e Luis rticip d si Alons x ants year ’ Allocat o, and Steve s (the lions to engthn Bas of Targ time s. 2 et f D 018. or at the e F “401( l und ong s kitud ) ................................ Plan inal Ass analys et All is), ocat wio hil n, e .......................... the Acc median ount Balances 14 , target date funds at year-end 2018, 88 percent held one age-appropriate target date fund (see Holden, VanDerhei, and Bass have l non–tar arge get r b da ate b lances at alance the d fu be ndg sinn , or com ing of pa the nys s tu toc dy k. Th perio e s d hare than of yo consi unger w stent 401 orkers or (k) t part hose icip wit ants h s w hoh rter ten o held ures at leas —sthowed some end 2016 through year-end 2021 before falling in 2022 alongside stock and bond market >30 163,493 189,178 191,991 253,092 297,115 326,977 309,043 average 401(k) pld an $71 sp1 onso billrs cha ion per y nge ear. their serv ice providers, all participants in those plans would be excluded from the consistent 2016–2022 47.7 percent of consistent 401(k) participants in their fifties had held no target date funds at year-end 2016, compared end 2022 EBRI $50,000 /ICI 401(k) database represents 25 12.3 million 401(k) plan participants. Account balances are participant account balances held in 401(k) 1 tende be trad ckto ed be ovwei er multi ghtepl d e to ye ward ars.equ For ities. A eachltogeth particier, at pant, year data in -end clud 2022 e dat , e e qof uities birt— h, efquit rom y fu whic nds, th h an e equity age grou p p ort is io as n o sigf ned; partici 2021).pan and t for Loa the n e Act ntir ivity e dat C i on 20 nabase sist16 ent.” was 4 sam ICI Re ple 4 is n years earch old (Figure A Pers EBRpe I/IC ctiv I 40 e 11) 2 (k) 4., n Simil o. 6, arly, wh C and onsist Ee ile BRI nt the sa Is m med sp ue le B in ian rieft, n enur o. EB e 458 Rin I/I the C (Se I 4 e 0 ptemb 1 nt (k) ire er). A target date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the 1 mo equiti Ev re mod id es in ence dec the est of li pe ne i Reallocat r 4 rce s. 0 1( Ove ntage k) a rall, ion cco g Act rth owth in acco unts e ivity avera increase to or fro ge ac ud mo nt size count m Tar de b (Fi sge tly algu ance t from Date re 4). i year ncreas Fu Fo nd - r e end 2 s e Amon d xam at016 a ple, t g com Consis (92 he av pou .8 pe tent nd era rc a ge e nnu 401(k nt) ac ato count l )ave year Part rage gro b-icip al en ance d an 2ts 022 wth o ............... f 401 (r9 ate of 4.8 (k) 13.8 15 plans at the participants' current employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs sample. Indexes are set to 100 in Decem $0 ber 2016. with 42.0 percent at year-end 2022 (Figure 8). Among participants in their 12 twenties, 32.3 percent held no target date 2016 database in 2016 2022 database in 2022 target date funds, the equity portion of non–target date balanced funds, and company stock—represented about 70 fund’s date name.of hire, from which a tenure range is assigned; outstanding loan balance; funds in the participant’s investment databaseAv wailab as seven le at w years ww.i at ci.or year g/s-ys end 2 tem/fi 016 an les/attac d six hments years at /peyear r24--06 en.d pdf 20 a 2nd 2, th www.e e med bri.org ian te/ nure docs f/d oref the aultcons -source/ istent eb p rian - el 2 are not included. 23 Contributio 60s ns—which 2016 pA os llitively af 2017 fect 11 401(k 0,556) plan 2018 1 acco 32,78unt balanc 6 1 2019 35,6 es 20 —inclu 1d 7e bot 2020 2,436h employ 202,2021 5 er a 72 nd employ 226,32 2022 ee 3 207,002 partici pe rcent) pan (Figu ts in the re 6ir ). I sixties ncreas in ed creas equ ed ity e 87xpo .2 pe sure rcewas nt (a fou n 1nd 1.0 amo perc ng par ent coticipants o mpound an f a nu ll ages, al avera bu ge t thos groe wth in the rate) b ir sixti etween es percent from 2016 to 2022, rising from $70,664 to $153,680 at year-end 2022. The median 401(k) plan T 2 he S&P 50 See n 0 index ote m 21 easures the p . erformance of 500 stocks chosen for market size, liquidity, and industry group representation. 401(k) plan account balances tend to increase with both age and tenure among the consistent group of participants, as funds at year-end 2016, compared with 29.7 percent at year-end 2022. 13 App 8 endix .......................................................................................................................................................... 17 9 Not all participants are offered this investment option. portfolios pe Fo rce r the re nt of ; a con port nd as s on the y istsent et values 401(k ear-) en att pl d 2016 an ribu pte artic EBR d to ip t I/ICI 401(k) ahos nts’ e as fusnd ets s data (Fi . An gu base acco res , see Ho u 5 nt bala and Alden et al. 2018. 4) nce for . each participant is the sum of the 17 3 rose from Med iss iasn ue ev a- en g bri e :years ef /e br to i_i b 13 _458_k years 45 y- e over u ap rs date th - e 10 s ame s e pt1 pe 8 .pd rio 45fd .y (Figure A e ars 2) . 51 years 11 44 years >5 to 10 53,993 70,699 74,626 98,382 119,922 141,112 128,867 Note: Age and tenure groups are based on participant age and tenure at year-end 2022. The all category includes participants with contributions, and most 401(k) participants are in plans where the employer contributes. In 2021, nine in 10 The ICE BofA year showed the -en US Corporate I d 20 acco 16 and sunt balan mallest ndex year incr tracks the pe ce f -ea en or s des: consis 20 20 91 rform ) .8 te . Ip nt p nves ance of inve ercart ent tm icip ent ofa the stm nts ret ent grade co m urns, follo held we rather t e d q rporate debt a uities simi han lar patt at year an that is pub nual - ern end 2 co and ntrib licly issued in the US d 016, an increase utions d, th d at a com at sh generally are i omestic m account nc poun reas arket and de d e an d to fnual or m 92 os nom .3t inated 3 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project Few cons they do inist the en cros t 401( s-ks)ection partic al ipEBRI ants had /ICI 40 the1( ir kenti ) data re base. 401(k Younger ) balances inv partiest cipan edts in or eq tho uitises, e with and shorte slight r job net mo tevem nures ent at their to Changes in Consistent 401(k) Participants’ Allocations to Target Date Funds 24 26 GICs are guaranteed investment contracts. For the complete update from the year-end 2022 EBRI/ICI 401(k) database, see Holden, Bass, and Copeland 2024. partici mpan issing tenure info t’s assets in rmall ation. A funds. ccount balan Plan balan ces are participan ces are const t account b ructed alances held as the sum of in 401(k) plans a all participan t the participa t balance nts' current s in the plan. Refe rences ................................ >10 to 20 ................................ 85,030 104,211 ................................ 107,068 136,................................ 967 162,651 1........................ 85,187 168,61 22 0 in US do 9 llars. participants were in 401(k) plans where the employer made contributions (Figure A6). This figure was relatively 4 pe of Te rce the nu nt at cha re ref ng yea ers e r in to -en acco yea d 20 u rs at th nts 23. w Slie ig th l curren htly arge larg t emplo r bal er a in ncreas ces yer .an es w d is ge ere o nerally derived f bserved acros rom date o s the rema f h ining ire repo agerted for the pa groups. rticipant. average growth rate of 20.8 percent over the period, to $68,080 at year-end 2022. that full concentration occurred between year-end 2016 and year-end 2022. To be 100 percent invested in equities, the current employers tended to have smaller account balances, while those who were older or had longer job tenures EquitiThe as es includ se et all equito y cation of funds, com p pa arti ny cipan stock,ts th in th e eque c ity p ons ortiist on ent of tas rg ae mple t datevar funie ds, d wi andth p the art equicip ity paont rtioage, n of na on patt –targern et d that ate baala lso nce id s o fubserv nds. ed employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included. Betwe ICE BofA en year US C-orporat end 2016 e I and ndex. year Atlanta: -end ICE 2022 D , consis ata Ind tent ices, 401(k LLC. ) part icipants’ use of target date funds increased, with >20 to 30 135,248 159,815 161,952 205,292 239,629 264,427 241,105 Sources: LSEG Data & Analytics, Federal Reserve Bank of St. Louis, Standard & Poor's, and ICE Data Indices 25 5 Te unchan nu Thre wi e EBR gelld du not reflect the ye I/ICI 401(k) ring the l data ongibas a tud rs of partici e en inal viro study. nmen pati 10 Reg on in the 401 t is certi arding fied to b ind(k ividual partic ) pl e f an ully co if the 4 mpli ipa 0nts 1(k) ant wi ’ plan was a contr th th ibu e IS tion O dded by -27002 Informat activity, the de efin mplo ed ioyer n S contribu at a ecuri later ty Audi tion t Endnotes ................................................................ 14 .......................................................................................... 23 See Figure A3 for additional detail. Asse Note: T ttende 40 all1 o( ca k) he consistent d ti i oto nv n b h est y av ag or woul e e g hi sam ro gh up ple is 2.1 m er d have is acco amonunt balanc gallocated illion 401(k) plan pa the consist the es. ent ir sa f For exam m ul rticipants with accou pl le 4 01(k) of 2.1p b m le, within ia llilance on 401 nt balances (to the k) equit pla con n py fu as at the en rtist icin p ent ds an ants grou d of each wd/ itho p, am ar company cco year from un ong 40 t balan 2016 throu sto ce 1( s kck a ) p t . Analyzing t th artic e gh 2022. enip d o ants f e Participant ach with he year from 2016 through 2022. Inv in the e stm crosent s-se ctional EB Options RI/ICI 401(k) database. Younger participants generally tended to be more invested in equity more participants moving into than out of these funds, on net. At year-end 2016, 55.3 percent of consistent 401(k) 40 1(k) Plan Parti >30 cipants Can 227,4 Accumulate 19 262,006 Sizabl 264,864e Acc 329 ount ,948 Balances 378,807 407,254 377,462 18 6 • Younger 401(k) participants or those with smaller year-end 2016 balances experienced higher age is age as of the year-end indicated. stan Ev date or i (DC ide )dard. More plnce an f th p of ere a artici over, Real re restricti pan EBR loca ts ten I ha ti on d on Act s obtai ts on partici o continu ned ivity e a legal opi pating in the to or contribu from nio ting 40 n th Eq to t 1(k) at the uit heir plans plan ie methodo s Am immedi in ong Consi a logy ately u ny g use iven pon d meets ste ye hire. ar n.t 4 the priva Th 01 e patt (k)cy sta P ern ar o ti nda cipa f 4rds of the 01(k) nts p lan Gramm- The year-end 2016 EBRI/ICI 401(k) database represents 27.1 million 401(k) plan participants. group of consistent 401(k) participants at year-end 2022, the data show that 0.7 percent, on net, moved to a 100 mo Internal re than Rev 5 t enue Service, o 10 years o S f ttat enure istics at ofy In ear c- om end e Division. 2022, older p 2021. articip SOI T ants ax Stats tende : In d to divid hav ual e hi In gh format er balan ion ces Ret than urn Form youn W ge-r 2 funds and target date funds, while older participants were more likely to invest in fixed-income securities such as bond Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project participants held at least some target date fund investments in their 401(k) accounts, and that share increased to 60.0 7 Trends in the consistent group’s account balances highlight the accumulation effect of ongoing 401(k) participation. At Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project percent growth in account balances compared with older participants or those wi 27 th larger year- Leach-Bliley Act. At no time has any nonpublic personal information that is personally identifiable, such as a Social Security The ye acco ar-eunt balan nd 2022 EB ce g RI/IC ro I 4 wth 01( rate k) dats a f brom ase r year eprese to nts year 12.3 a mlso illio refl n 401 ects (k) p the lan p sto artici ck p amark nts. et performance. Between year-end 2016 10 In the EBRI/ICI 401(k) database, investment options are grouped into eight broad categories. pe Mov partici rce ement i nt e pan Stat qu ts: t n iti ist tes allocation hos he icse . Availabl conc in the entrati ir— fo e at 4.9 on of rties ww pe w e w.i rc it qent h uities rsmo .gov/st ofre tha thi in 4 satis 01(k) gn roup tics 5 to p /soi at y art 10 -icipan tax ear years --sen tat ts o d 20 ’ accou s f -tindivid en 16 and ure nts ual h results ad 5. -i an nf 6 orm pe average frce ro ation m chan nt at - accou ret ye ur ge ar ns--nt in e form nd bsala toc 2022 -w2 nce k values a - sw of ta ere 10 tis $89,59 tics nd . 0 7, All All 70,664 87,191 90,202 119,741 144,516 166,360 153,680 fun Th ds, e cro money ss-sectio funds, na or guar l EBRI/ICI antee 401(k) database also d investment contra shows that y cts (GICs) ounger p and other stab articipants a le val nd th ue fun ose w ds.ith shorter tenu res tend to percent at year-end 2022, with the net increase occurring across participants in all age groups (Figure 6). In both $10M or less >$10M to $100M More than $100M All plans year-end 2022, 21.9 percent of the consistent group had more than $200,000 in their 401(k) plan accounts at their Figures end 2016 balances. Three primary factors affect account balances: contributions, investment returns, and number, been transferred to or shared with EBRI. and year-end 2021, the US stock market generally rose (Figure A7), which tends to provide a boost to 401(k) plan • Equity funds consist of pooled investments primarily invested in stocks, including equity mutual funds, bank Note: pe Fun rce ds nt i inclu nv deest mued tua lin equ funds, ities bank ( co Fillgu ectriv e e7 tr)u . st This s, lif n e iet c nsurhange r ance sepa efl raects te acco 1.7 un tp s,er acent movin nd any pooleg d ia nv way f estmerom nt pr the oduct 10 pr0 im percent arily invest ed in the security indicated. Age group is based on the from rea comparellocati d with on activity an average by of partici $128,86 pan7 ts . A for p lthough in articipants for i mat n their ion sixties on spe w cific ithtra more ding ac than tivity 5 to of 10 yea 401(krs ) of partici tenure pan (F ts is ig n ures ot 3 have lower 401(k) balances than those who are older or have longer tenures. See Holden, Bass, and Copeland 2024. years, younger 401(k) participants were P m lan ore li assetskely to hold some target date fund investments compared with older current employers, while another 17.3 percent had between $100,000 and $200,000 (Figure 1). In contrast, in the withdrawal and loan activity. The percent change in average 401(k) plan account balance of participants in participant's age at year-end 2022. Percentages are dollar-weighted averages. Note: A Inves acco unts hol ge and te tment Co ding equ nure groups a mpany I ities. O nst re based on itut n e. Quart avera participant ag geerly S , about 21 up e and ten plem 70 perce enta ure at year-end n ry t of Data. the W co 2022. T as nsis hin tent sam ghe ton, DC: all category includes participants with m ple o Inves f 40 tm 1(ent k) partici Compa pan ny Institute ts’ acc issing tenure ount . 26 Finally, loan or withdrawal activities can have an impact on 401(k) plan account balances. Although in general, very few collective trusts, life insurance separate accounts, and other pooled investments. allocation to availabl and A3)e . Amo in th sng om e EBRI co ething le nsis /ICI tent 4 s0 s,partici 1( 2.4 k) data ppan ercent base, ts in mo the ving it i ir sixties s poss to a 1 ib a 00 le t year t pe o observe rc -end ent a 2ll acti 0ocat 22, t vity ion, and hos aw e ay with 3fro .2 more t m or to percent han 5 t stic 100 king with p o 1 ercent 0 years o or 100 perce zero f tenure equity nt Account balances are net of unpaid loan balances. Thus, unpaid loan balances are not included in any of the eight asset participants: 70.3 percent of consistent 401(k) participants in their twenties had target date funds in their 401(k) Figure 1, Distribution of 401(k) Account Balances by Size of Account Balance ...................................................... 6 broader EBRI/ICI 401(k) database, 8.8 percent had accounts with more than $200,000, and 8.1 percent had between inform ation. Account balances are participant account balances held in 401(k) plans at the participants' current employers and are net of plan loans. Source: Tabulatitheir ons frotm wen EBtR ies I/ICwas heav I Participan ily t-Din ire flu cte en d R ced etir b em y th e 15 nt e Plrelat an Daive siz ta Colle e o ctio f nthe Proir jecontr ct ibutions to their account balances and balances were invested in equities (Figures 5 and A4). • activ Similarly, e 401(k) pl bon and pfartic unds ip are ants any take poole withd drawals, account primarily participan inv tsest in th edeir s in bo ixties ten nds. d to have a higher propensity to make allocation to equities in both 2016 and 2022. In other words, 65 percent of consistent 401(k) participants with their categori hold had a in l gs at oes des wer a yec verage ar ribed. -end. 401 Am(on k)g pcons lan balanc istent 401( e ($128, k) partici 867) th paan ntsthos bete wee with n ymo earre than -end 2016 30 year and y s of ear t-enur end e 20 ($377, 22, few mo 462). ved to, Retirem accounts at y ent savings h eareld in plans a -end 2022, c t previous em ompared w ployers or rolled ove ith 57.0 percent r into I of RA cons s are not includ istent 401( ed. k) participants in their sixties. Nevertheless, Source: ICI tabulations of US Department of Labor Form 5500 Research File $1 Inves 00,0 tm 00 ent and Co $2 mpany I 00,000 nst . itute. 2024. “The US Retirement Market, First Quarter 2024” (June). Available at increased at a compound average 16 growth rate of 48.6 percent per year between year-end 2016 and year-end Fi gure 2, Consistent 401(k) Participants Accumulate Significant Account Balances ................................................ 7 withdrawals as they approach retirement. 40 or away 1(k) accou fromn , the ts full sey einvest xtreme es of d in equiti equity h es a oldi t year ngs.- end 2016 were fully invested in equities at year-end 2022. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project www.ici.org/research/stats/retirement. 2022. ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Iss s s s s s s s s s s s s s s s s s s s s s s sue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue B ue Bri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri riA ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef resea • • • • • • • • • • • • • • • • • • • • • • • • Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu Augu rch repo s s s s s s s s s s s s s s s s s s s s s s s st 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 t 27, 2024 rt from the E • • • • • • • • • • • • • • • • • • • • • • • • No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 No. 617 BRI E ducation and Research Fund © 2024 Employee Benefit Research Institute 21 23 12 17 25 16 22 20 24 14 10 13 18 15 11 5 4 6 2 9 7 3 8 19

Volume 617

Pages 25

EBRI Issue Brief

Aug 27, 2024

Sarah Holden

Steven Bass

Craig Copeland

Retirement