“401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2019” reported year-end 2019 account balance, asset allocation, and loan activity results for the EBRI/ICI 401(k) database, which consists of a large cross section of 11.1 million 401(k) plan participants. This paper presents a longitudinal analysis—the analysis of 401(k) participants who maintained accounts each year from 2010 through 2019—that was not included in the previous report. The longitudinal analysis tracks the account balances of 1.3 million 401(k) plan participants who had accounts in the year-end 2010 EBRI/ICI 401(k) database and each subsequent year through year-end 2019 (a nine-year period). The entire series of research updates is available at www.ebri.org/retirement/401(k)-database.
For all of the figures in this report, components may not add to the totals presented because of rounding.
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, experienced by individual 401(k) plan participants over time.
A few key insights emerge from looking at the 1.3 million consistent participants in the EBRI/ICI 401(k) database over the nine-year period from year-end 2010 to year-end 2019.
- The average 401(k) plan account balance for consistent participants rose each year from 2010 through year-end 2019, with the exception of a slight decline in 2018. Overall, the average account balance increased at a compound annual average growth rate of 15.6 percent from 2010 to 2019, rising from $58,658 to $216,690 at year-end 2019.
- The median 401(k) plan account balance for consistent participants increased at a compound annual average growth rate of 18.8 percent over the period, to $108,433 at year-end 2019.
- The growth in account balances for consistent participants generally exceeded the growth rate for all participants in the EBRI/ICI 401(k) database.
Younger 401(k) participants or those with smaller year-end 2010 balances experienced higher percent growth in account balances compared with older participants or those with larger year-end 2010 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 thirties was heavily influenced by the relative size of their contributions to their account balances and increased at a compound average growth rate of 26.0 percent per year between year-end 2010 and year-end 2019.
401(k) participants tend to concentrate their accounts in equity securities. The asset allocation of the 1.3 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 2019, more than two-thirds 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.
Figure 11 Figure 9 Less Than One-Fifth of Eligible 401(k) Plan Figure 6 Most 401(k) Plan Participants Are in Plans With Employer Contributions Participants Have Loans Outstanding 9 Figure 10 target By year Sampl Fi inf end Ref Plan Sponso glu ure ence 2019 ere date 8, e of -en d by n 401( (d the f ces r u Consi 2Council nd 01 the k) lates P s 9, the ,re lan the ste t lative of data Co equit consi nt 4 Am ntri siz av erica. 01 y p bu sailab e tent sam tions of (k) ort the lion e), 20 Part , 2 ir contri Ben of 0 cont pl . no e ici 6 ef 3rd of its n pants, ribu bu –4 D targ tions A 01 tions isburse nnu (k) et to 20 a p to th dat l 401 art Sd, Inv 10 ue rvey icipan ba eir – (k) 2019 lance est of acco pts lans have ment R Profit ad fu unt ba lso was nd Sharin es lances an turns averag , old an g er, , an d acom nd on a ed d d inc 4 As $ pan 01 381 verage, sreas ets (y st k)b P ................................ ill ed ock lans: ion comp at a — a rR y ep co efl ea ared with res mpoun ecti r, and b ented ng d 2 part ene 01 m avera ore than 9......... fits iPlan cipan ge p ai ts 12 d Thanks to Adam Bensimhon, EBRI Data Compliance and IT Director, for data tabulations. What Does Consistent Participation in 401(k) Plans Generate? Changes in 401(k) Plan Account Balances Among Consistent 401(k) Participants Percentage of eligible 401(k) plan participants with loans outstanding, year-end 2019 Percentage of active 401(k) participants in plans with employer contributions by plan assets, plan year 14 10 Domestic Stock and Bond Market Total Return Indexes Data from the ICI Survey of Defined Contribution Plan Recordkeepers find that DC plan participants generally stayed the growth in ( two inclu th -thir e ding e rate ntire ds of Experi roll of E c ov BRI/ICI ons ence 26 ers .ist 0) . h C pe ent 401(k ave a hicag rce 401 nt verage o: ( )pe k) d Pr y p atabas lan lan ear d S p $ ponsor 380 be e. artic F tw o bi ieen r ex pan Cou llion ts am y (Fi ear nci ’ as pll gu -e, send of ets fe r America. e 8) (Figure wer 20. Invest 10 than 0.5 and year 7, men lowe pe t returns -r p en rced an nt of 20 el). 1 — the 9int . e p res artic t, di ipants viden in the ds, and real consisize tent g d and roup Percent change in average 401(k) plan account balance among consistent 401(k) participants by age and tenure Brady, Peter, and Steven Bass. 2021. “Who Participates in Retirement Plans, 2018.” ICI Research Perspective 27, no. 8 Among the 401(k) partici pants with accounts at the end of 2010 in the EBRI/ICI 401(k) database, 1.3 million are in the C Figh ure 9, ang Mos ets 4 0i 1(k n )4 Plan 01 P( articipants k) Pla Are n iA n Plans cco Wit un h Etmployer Co Balanntribu ces tions , 2 ................................ 010–2019 .................... 13 Sarah Holden is Senior 6 Director of Retirement and Investor Research at the Investment Company Institute (ICI) Compound A . nnual course through the financial crisis and ensuing years. During each year from 2010 through 2019, fewer than 3 percent of DC unrea were ilinze the d as ir t swen et ap tiprec es an iatio d 1 n/ 3 dp ep ercent reciation wer— e var in the y signi ir thi fic rti antly from es at year yea -end r to year. 2019 (Fi F gu or re example, 1). In the enti on net re EBRI they h/ICI ad n 401(k early no ) 2003 6 2007 2 1008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (September). Available at www.ici.org/system/fiF les/ igu20 re 2 51-09/per27-08.pdf. Month-end level consistent sample. These consistent participants had accounts at the end of each year from 2010 through 2019; they Age Tenure Average Grow th 40 The as S&P 1( Steven 5k) p 00 set al . Ne arBas lo ti wcipants cation of York: Sta s is an ten econom pnd arti d ar cipan to d ist & c P at o tsoor nce in th ICI. ’s. ntr Crai e c at ons e their g Copelan istent acc s 24% ad is mple ounts thvar e Dir in ie equ ecto d with p r o ity s f W art ecuri ealth icipati nt R eesear s. age, The ch a ass patt at t et allo ern he that Em cation of plo ayee B lso is the o ene bserv 1.3 fit ed plan pa Figure 10, rticipan Domes ts stopped co tic Stock 480 a ntnd ributi Bond ng to their 401(k) pl Market Total Ret an ur a n cco Inde unx ts. es S ................................ ome of these participants ma ................................ y have stopped .......... 14 By Sarah Holden, ICI; Steven Bass, ICI; and Craig Copeland, EBRI impact o databasen at asy sear ets- ie n 20 nd 2019 11 an 401(, kd 14 ) 2 P015, p la ercent n A bu cc t of o pr u p ov nartic t id Bed aip la a ants nc sie gn swere iA ficant mo in n the boos g Cir ot as t nwen sisthe te tin es an s t toc 401 k mar d (k 2)4 P p ket ros a ercent rticipe wer an shar tse p in ly f the rom ir thi 2012 rties. Group (years) 2010–2011 2011–2012 2012–2013 2013–2014 2014–2015 2015–2016 2016–2017 2017–2018 2018–2019 2010–2019 Rate, 2010–2019 make up a longitudinal sample, which removes the effect of participants and plans entering and leaving the database. 11 Figure 4 June 30, 2022 • No. 562 22% 2in million 40 0sthResearc e croA s 1(k ls l -h s)e In p ctional EB lan s 5ti 64 .tute p 0 4% 0artic (EBRI) RI/I ip 5a 1.nts 0CI 4 %. i Tn 0 his 1(k the 5Is 5) .2 d s co % ue ata nsBr ist base. ief 4ent 2. 0was %grou Young wri p was 20 tte .43 0er % 1n with (k p b ) partic aroa rtic2 ip 4 dl as aip .n 1y si t% s ants aist namilar to t lyance s generally is 37.1from % he as the ten 1.3 s In % de et all sd titute’s r to ocat 4favor 1.6ion %esear eq seen 1u ,4ity fu ch and 24i.n 6% th ne ds an ed anitori nual 3d 5.4al % contributing because they reached the contribution limit. See Holden and Schrass 2022 for DC plan participants’ annual BrightScope and Investment Company Institute. 2021. The BrightScope/ICI Defined Contribution Plan Profile: A Close Thi through rty-seve 201 Ave n4, p ra ercent and ge i 4n 0 of 201 1(k) the partici 6 p,l a201 n a7 cco , a pan u nd 201 nts t b in al the a 9n . ce From consis for year co ten nsi -t sam end sten 2010 t pl 4e 0 were 1 thro (k) p i a ug n rtih tci heir year pan ft- is fties en bd y a 20 and ge 19 a 22 , i nnves dp ter en cen tm ure ent t we , ye ret a re r- urns e in nd thav eirerage d Initially, this group was demographically similar to t Consiste he e nt 4 ntire 01(kEB ) PRI/ICI articip 4 a0n 1(k ts ) database at year-end 2010. However, by Figure 11, Less Than One-Fifth of Eligible 401(k) Plan Participants Have Loans Outstanding ..................................... 15 >5 to 10 184.1% 100.3% 73.2% 56.9% 23.4% 33.1% 34.8% 9.6% 42.5% 5,243.3% 55.6% US Department of Labor, Employee Benefits Security Administration. 2021. Private Pension Plan Bulletin, Abstract of 400 EBRI/ICI target staffs. date 401( f Any vi und k) d se , while atabas ws ex older press e updates. ed pa in rticip this On ants rep average w ort er are those e at moyrear e lik - of end ely to inv the 2019 aut, est hor a mo in re tha f nd s ixed hould not n -incom two-th e s irds of b ecurities such e ascribe consis d tent 401 to as b the of on (ficers, k) d fun ds, activities between 2008 and 2021. For an analysis of contribution activity during the be 9696969696ar 96 mark 96 et of 2000–2002 using the Look at 401(k) Plans, 2018. San Diego, CA: BrightScope, and Was 95 hington, DC: Investment Company Institute. 95 $ sixties, compa 355 billion pered with r year. 25 percent and 13 percent, respectively, i95 n the entire database at year-end 2019. Accumulate Significan94 t 94 Account Balances 94 94 year-end 2019, these participants had grown older, accr 93ued longer job tenures, and accumulated larger account 18% 93 18% 2019 Form 5500 Annual Reports (Version 1.0). Was 92 hington, DC: US Department of Labor, Employee Benefits 360 92 9292 92 Tenure 91 91 91 9191 cro mo partici Introduc ss ney funds, trus -sectio pan tees tsna ’ a , or ot tio l sor g EB sets n RI/IC uar her were inv antee I 401(k sponso dest i ) database rs nves ed of in EBRI, tmeq ent s, se u Empl c itiontrac es e Ho — 91 oy through lden an ee ts (G Bene ICs equity d VanDe fit R ) and esear funds ot rhei 20 her ch I , th stable 04. Th nst e itute equ value f e a ity -Ed na portio ucati lysis fi unds. on n nds of and targ that, o Researc et dat veral e hl, f und 401(k) Funs d , t (EBRI he e 90 qu - ity 30s All 27.0% 38.4% 37.1% 31.6% 12.3% 23.2% 27.7% 2.9% 38.8% 700.5% 90 26.0% Available at www.ici.org/files/2021/ 90 21_ppr_dcplan_profile_401k.pdf. 89 What Does Consist ent 89 Participation in 401(k) Plans 89 Gene 89 rate? 89 88 Average 88 balances compared with participants in the year-end 2019 cross section. 87 88 Age Group (yea 3rs 20) 2010 2011 2012 2013 2014 2015 2016 2017 87 2018 2019 >5Security A to 10 114dmi .5% nistr 8ation (Se 0.2% 6p 5tember) .7%86 3. Avail 7.8% able 19 at .9% 30.1% 33.2% 5.9% 42.4% 2,665.2% 44.6% partici portion o Contributio ERF), panf non ts’ or ns co th — – ntributio eir s whi target ch taffs. N p d n ra os atiti e b tes were li either vely af alance EBRI nor fect d ttl fun e cha 401( ds, or comp EB k) nged p Rlan I in 2000, -ERF acco any s lob unt bi 2001, an toc es k. Youn or takes d 200 ge p2 when r os 40 iti1(k ons co ) on pmpa articip spred to 1999. O ecific ants p ten olicy d p to 85 ro n a hpo ave higher vera sals. ge, 40 EBRI 1(k) invi tes Figure 8 C The EBRI onsistent /ICI 401(k) Partici d pants Ha atabase, w ve Accu hich is co mul nstat ructed ed Siz froable 4 m the ad 01 mi (k nistr ) Plan Accou ative records n of t Balance 401(k) psla ns, represents a large >10 to 20 24.5% 35.5% 33.7% 32.9% 11.4% 22.6% 26.4% 14% 2.7% 38.6% 636.4% 24.8% Ch a 30snges i A2n ll80 40 131 ,99( 5k) P 17,7l7a 5 n A 24,5c 98cou 33,n 734t B4a 4,4l 0a 3 nc 49e ,86s 3, 2 60 1,41 190–2 78,0 42219 80,713 112,024 Fi nally, loan ww o w.d r w ol. ith gov dra /swal a ites/dolg ctivities can ov/files/EBSA have /r an esea impact rchers on 401 /statist (k) ics pl /retireme an accou nt nt b -bull ala etins nces. /privat Althou e-pgension h in genera -plan-l, bull very fe etins-w 401(k) Plan Contributions, Benefits Disbursed, Clark, Jeffrey W. 2022. How America Saves 2022. Valley Forge, PA: The Vanguard Group, Vanguard Center for participants’ contribution behavior does not appear to have been materially affected by the bear market in equities from 2000 bal concentra anc com es 79ment on — tions includ in eq e t b his researc oth uities t emplo han h. yer an older d 401( emplo k) p yee contri articipanbu ts.t ions, S&P 50 an 0² d 78 cross section, or snapsho EBRI/ICI 401(kt, o 78 ) D 78 af ta4 ba01 se(k) plans at the end of each year. It is a cross section of the entire population of 77 >5 to 24 1 00 3,824 8,204 14,783 24,492 33,752 40,466 52,630 70,128 74,266 105,742 Tren Age and Te ds in the nure of consistent C 76 on gro sist up’s ac entcount 401(k) balances Part 12ici high pants light th e accumulation effect of ongoing 401(k) partici $216,pati 690 on. At 76 76 75 Investment Returns, and Assets 4activ 0s e 401 abstr A( llk) act plan 1 -2 2 p .019. 5% artic pd ipf2 a .6 nts .3 % take 3with 3.0% drawals, 20.9% partici 7.4% pants i1n 7 th .3%eir sixties ten 23.5% d 0to .6% have a 34h .4ig %her p 3ro 81.pe 0%nsity to 1 9mak .1% e through 2Retireme 002, whether me nt R 74 esearch. Availa asured in dol bl lar amounts or percenta e at https://institutional.va ge of salar nguary th d.com/c ey contribu ontent/ ted. dam/ inst/vanguard-has/insights- mo By sSarah t 401(k) H part ol 73den, icipants ICI are ; S in pla teven ns wh Bass, ere the ICI; a emplnd oyer Craig Copeland, EBRI 401(k) plan p 72 articipants, Consistent Sa m an pld e it represents a wide range of participants—including those who are young and individuals 72 71 >10 t 2o 0 0 20 15,711 19,555 26,493 35,423 47,069 52,436 64,309 81,268 83,488 115,692 year-en>d 5 t2019 o 10 , 33 70.4p %ercent 6 o 0.9f %the consis 53.9%tent g 33rou .8%p had 1 m 6.3% ore than 26.0 $20 % 0,000 in 29.6% their 4. 401(k 4% ) p 38lan .2% acc1 ounts ,445.7% at their 35.6% 13 Suggested Citation: Holden, Sarah, Steven Bass, and Craig Copeland, “What Does Consistent Participation in withd At year rawals, -end 2a 01 s the 0, the y a consi pproasch retir tent g rou ement. p was similar in a ge to the participan Annts ua in th l flowe entire s reporte EBRI d on F /IC orm I d 5ata 500 base. and yFo ear r-end pdfs/22_TL_HAS_FullReport_2022.pdf. contributes. In 2019, more than nine in 10 participants were in 15 >10 to 20 151 .1 6% 0 28.0%8% 34.0% 22.6% 8.1% 18.7% 23.8% 1.0% 34.6% 422.3% 20.2% who ar 40e s new to thei All r jobs, 39 a ,82 s5 well as ol 44,786der p 5artic 6,571ipants 75 a ,24nd 4 thos 90,e 98w 0 ho have 97,718been wit 114,65h 7 the1ir 41cur ,640rent1 e 42mploy ,517 ers 19 f 1,5 or 70 many See Holden and Schrass 2022. Yahoo currentFi enan mployers ce. Su, w nnyval hile a e, C nother A: Yahoo. 20 pe rcent had between $100,000 and $200,000 (Figure 3). In contrast, in the 401(k) Plans Generate? Changes in 401(k) Plan Account Balances, 2010–2 a01 sse 9t,s ” , E bBRI illions Is o sfue do B lla rie rsf,, n 20o. 00– 52 62 02 , a 1 nd ICI example, >20 36 to 30percent 7.5% of the partici 21.6% pan 29.3 ts % in the 19 consis .5% ten 5.t sam 1% ple 1 were 4.4% in 2t0 heir .9% twenti 0.1es or thirt % 34.8ies i % n 2 29 01 6.20, % the sa1me as 6.5% 401(k) plans wher1e 20the employer made contributions (Figure 9). >5 to 10 8,866 15,107 24,303 37,405 50,036 58,184 73,308 95,039 99,197 137,042 years. For example, at year-end 2019, 14 percent of 401(k) participants in the EBRI/ICI 401(k) database were in their $168,236 $167,638 broader EBRI/ICI 401(k) database, 11 percent had accounts with more than $200,000, and 9 percent had between 16 4 Federal Researc Reser h P ve Eco erspenomi ctivec , vo Data (FRE l. 28, no. D). 7 St. Louis (June 2022). : Fed eral Reserve Bank of St. Louis. Interest, partici See Ho pan lden, B ts in the ass e , and Copel ntire database (F and 2022 ig.ur e 1). Thirty-five percent of the participants in the consistent sample were in A T A G L A N C E 80 Figure 7 >10 to 20 34,899 40,167 51,401 68,882 84,483 91,327 108,366 134,115 135,443 182,272 Although this figure fell slightly in the wake of the financial market 50s All 7.8% 20.5% 28.6% 18.2% 5.2% 14.1% 20.8% 0.1% 30.6% 274.5% 15.8% twenties, while 13 percent were in their sixties (Figure 1); 20 percent of participants had two or fewer years of tenure ICE BofA US Dividends, $100,000 and $200,000. their for >ties 5 to 10in 20 410 6.1 40 % , while4 A 28 percent 7v .0e %rage A 46 s .1 s of % et part Allo2icip c 9a .2ti % ants on o i f n 1 4 30 t .2he 1 % (k) entire Pla 2n 3. d 4A % c ata cobase un 2ts 6.6 b were %y Pa i rn ti 4 t c .8iheir fort % pant Ag 35ies. e .1% Twen 914 ty .7- % four percent o 29.4% f >20 to 30 62,270 66,928 81,354 105,160 125,668 132,128 151,208 182,844 183,088 246,713 17 Corporate Index³ crisis, reaching a low of 85 percent in 2010, it had generally Total Total Benefits Gains, and Assets at at their For the compl current jobs ete u, w pdate f hile ro 4 m the y percent ear had -end mo 2019 re than EBRI/IC 30 years I 401(k) database, of tenure (Fi$gu see Hol 140re ,14 2 3 ). den Participants , Bass, and Copeland 20 in the consist22 ent . s ample “401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2019” reported year-end 2019 account balance, Notes HoldC en, opyright I Sarah, Steven nforma Bas tiso , an n: d T Crai his re g port is c Copelan opyright d. 2022ed . “4 b0y 1(k the ) P Em lan p A loyee sset All Bene ocat fit Res ion, Account earch InsBala titutnces, e (EBRI) and Loa . Youn may >10 to 20 13.2% 25.5% 31.2% 22.5% 7.7% 17.1% 22.2% 1.6% 1 32.1% 2 372.5% 3 18.8% 4 0 Percentage of 401(k) plan account balances Contributions Disbursed Other Items Year-End the participants in the consistent sample were in their fifties, compared with 26 percent of participants in the EBRI/ICI 50s All 71,720 77,347 93,168 119,799 141,624 149,049 170,087 205,424 205,663 268,560 rebounded during the longitudinal study. Regarding individual >20 to 30 6.1% 18.8% 27.3% 17.8% 4.1% 12.9% 19.8% -0.2% 30.9% 247.6% 14.8% are b Reflect otin h g olth deei r an r hid gh l Don er ec- avera ge 07 r D te ec-0nured tha ge 8 D a ecge -09 and te Den pa c-10 Dnure, rticipants ec-11 Dt ehe c-12co in Densis t ch -1e 3 tent g D ov ecerall -14 D ro e data cup al -15 Dbase at es co had -16 Dec year -1averag 7 Dec --e 1nd 8e Dan e2019 c-1 d 9 m D. ee c-di 20aD n ac ec-21count balances asset allocation, and loan activity results for the EBRI/ICI 401(k$ )1 d 22ata ,963b ase, which consists of a large cross section of 18 copy, pr Activity int, or in 20 dow 19.” nloa ICI R d this esear rep ch P ort solely erspectiv for p e ers 28,ona no. l an 4, d an no d ncom EBRI Iss mer 2000ue Brief cial use, $169 , n po. rov 557 ided $172 ( that May) al . Availabl l ha-rd $79co e pi ates r 1,etai 738 n The EBRI/ICI 401(k) database environment is certified to be fully co Year-En mpli d 20an 10 t with the ISO-27002 Information Security Audit $116,925 >5 to 10 15,051 20s 21,985 32,321 47,217 61,024 69,083 85,233 All 107,940 113,084 152,730 database> over 30 all.4 .9% 15.8% 25.9% 30s 17.0% 40s3.2% 150s 1.4% 18.160s % -0.7% 28.9% 210.8% 13.4% partici pants’ contribution activity, defined contribution (DC) plan 1 2001 174 147 -119 1,701 that 11.8 w millio ere m n 4 uc 01 h (hi k)gh per lan tha par n t ticipants. he aver Balage aThi nce a s d F pap nd un m de s r ed present ian acc sount balanc a longitudina es l of analys the b isro —ader the an EBRI/I alysis of CI 40 40 11(k (k) d ) p atabas articipan e (Fi tsg ure Because of th any an ww d w.ici.org alese l copyrig chan /sys ges in ht tem/fil and ot the cross secti es her /20a 22 pp -05/p licab ons, er2 le not co 8-mparing a 0ices contai 4.pd Agfe a ofnd P vera arned ther tw icipw ge accou anw.eb t ein, a ri.org nt ba /d nd lances a oc you s/d may c efault cross di -is te or our fferen ce/e quote t ye bri s -ar ismall s -end ue-port cross ions - of standard. Moreover, EBRI has obtained a legal opinion that the methodology used meets the privacy standards of the Gramm- >10 to 20 41,119 46,546 58,421 76,671 93,893 101,089 118,391 144,704 147,060 194,270 $98,348 Although annual updates of the EBRI/ICI 401(k) database provide valuabl 2002 e perspe182 ctives of 40 147 1(k) plan account -203 1,565 participants tend to continue contributing in any given year to their 60s All So 6u .9 rc% e: Tabulati1 o6 n.s9 % from EBR2 I/I4 C.I0 % Participant1 -D 7i.r0 e% cted Retire 3 m .0 eFigure % nt Plan Da1 2 ta 0 .C 3o % llection P 21 ,r o 3 5j. e5 c% t. -2.5% 21.4% 181.8% 12.2% 4). At year-end 2019, the average 401(k) plan account balance of the consistent group was $216,690, more than two who maintained accounts each year from 2010 through 2019—that was not included in the previous report. The sectional snapshots can lead to false conclusions. For example, newly formed plans would tend to pull down the average the re brie port f/epro bri_ib_5 vided that 57_k- you xsec d -3m o so ay22.p verb Nonat df -Ti. am and w r get- ith proper citation. GICs Any use and beyond the scope of the foregoing Leach-Bliley Act. > At no ti 20 to 30 me ha 96,010 s any1 nonpu 01,848 blic 1 personal informatio 20,949 153,941 1n th 81,40at is personally identifiabl 3 188,881 213,206 2e, such a 55,387 2 s a 54,9S 0oc 3 ial Secu 333,777 rity Note: Eligible 401(k) plan participants are those in 401(k) plans that offer loans. 2003 186 141 $81,1 300 40 1,932 14>5 to 10 31.3% 36.7% 37.5% 24.9% 9.3% 18.6% 20.6% 2.8% 26.5% 526.9% 22.6% $78,267 balances, asset allA ocat nnuaion, l per a cend nt Con c l ho an an gsistent e act in toivit tal ry acros e Sample turn inde sx w Had ide Lo crong ss sections er Tenure of $75Th , p 35a 8an rticip Par ants ticip , cros ants s-sectional analyses are not plans. $76,900 $76,293 Equity Target-Date Date Balanced Bond Money Other Stable- Company Memo: $73,357 $73,672 long and a itu ha dina lf tl im analys es the is track averasg the e acco acco unt unt b bala alances o nce of $81 f 1. ,140 3 m ill amo ion 40 ng parti 1(k) p cipan lan p tsartic in th ipe entire ants who EBRI had /IC acco I 40 unts in 1(k) d the atab year ase. - account balan $c 5e, but wo 8,658 uld tell us nothing ab $72,38out co 3 nsistently participating workers. Similarly, the aggregate average account requires EBRI >3’s 0 prior $631 ,ex 7 35 50 ,7 pres 75 s p 14 ermis 2,385 sion. 164For ,827 permis 207,5s 65 ions,2 p 42lease ,947 con 22004 50tact ,611 EBRI at 279,200 permis 329,s 60 ions@ 4 3eb 27,4 ri.org 21 . 421,928 number, been t >10 to 20 ran 13sfe .9%rred to o 23.6r sh % ared 27.wi 0%th EBR 22 I. .9 % 6.6% 14.0% 17.9% 204 0.0% 24167 .5% 291.6204 % 16 2.,4 1% 93 1, 2 2 4 $63,929 Age Group Funds Funin ds the EBRI/ICI Funds 401(k) FundsDatab Funase ds at Valu Year e Fund-sEnd Sto2019 ck Other Unknow n Equities well suited to examining the impact of consistent participation in 401(k) plans. Cross sections change in composition $60,329 Holden, >2 Sarah 0 to 30 , and Da 6.$ 15 % 8,99niel S 1 16.chras 7% s. 22022 2 S.& 4% P 50. 0²“De 18fin .1% ed Cont 2.5ribu % tion P 9.6la %n Participants’ 2005 14.8% Ac -2.2tivities % , 22 1.02 9%1.” ICI R 174.9% esearch 1Rep 1.9%ort The median 401(k) plan account balance among the consistent participants was $108,43 223 3 at year 189 -end 2019, 146 more tha 2,393 n end 2010 balan ce wo 60s EBR uld tend to be pu I/ICI 40 All 1(k8 )3 data ,ll 4ed dow 79 base a 8n if a 9,26nd e 4 large n ach subse 104,3umbe 35 que r of 129,4 nt year partici 27 1 pan throu 51,4ts retire and 06 gh 1year 56,019-en rold 20 l o 172 ver ,119 24their acco (a n 19in 8,7e 8- 2yea unt balan r p 193er ,84iod). 3ces to 2 The 3 ot 5,24 her ta entire 7 x - Percentage of participants by years of tenure, year-end 19 Abo 20s ut the EBRI/ICI 401 27.1% 40.2% (k) 3 Database .6% 5.8% 7.5% 8.2% 6.6% 0.1% 1.0% 72.0% Between year-end 2010 and year-end 2019, the US stock market Accoun>t balan 30 ces are 4.2% net of 12.2% unpaid lo 22 IC .4 E an % Bo bal fA Uan S1 C 6ces. Thu o .1 rp % orate Indes, 0 x.³7u %npaid l7 oan ba .9% lances a 12.8% re not -3. in 6%cluded in a 19.3% ny o1 f th 34.3e eight as % 9se .9% t from year to year because the selection of data providers and sample of 2006 plans usin 251 g a given prov 228 ider var 303 y, and because 2,773 Repo (April). Availa rt Av> ai 5 la to 1bil 0 bl ite y: at 21 Thi ,27ww 8s r w.ici ep 2ort 7.org/f ,93 i 9s availa iles/ 38,2022 2bl 00e on /21 5 th 2_rp ,5 e 30itnte _recsu rnet at 65,6rvey 29 w q4 ww.e .p 71df ,73bri.org . 8 8 5 ,054 102,555 105,476 133,398 s s qua eries of ix times lified accounts resea the m rch u ed . ian pd accou ates is nt b availa alance ble of at $1 www.e 7,587 bri.org for part /retirement icipants in /401 the (k) entire -database EBRI/ICI 40 . 1(k) database. Years of Tenure 30s 32.3% 37.1% 3.9% 4.7% 1.9% 5.7% 11.8% 0.3% 2.2% 78.3% 1 2007 273 261 215 2,975 generally rose (Figure 10), which tends to provide a boost to categories described. 401(k) participants join or leave plans. In addition, the analysis covers account balances held in 401(k) plans at >10 to 20 36,696 41,814 51,663 65,603 80,595 85,890 97,914 115,444 115,444 143,707 A ll All 8.7% 20.6% 27.9% 18.9% 5.2% 14.0% 20.0% -0.4% 29.3% 269.4% 15.6% 0 to 2 >2 to 5 >5 to 10 >10 to 20 >20 to 30 >30 2 The EBRI 40s /ICI project is 43.8%unique because 21.7% of 4.2% its inclusion o 5.9% f d 2.ata 7% provide 7.0%d by a 12wi .5% de va0riety of .6% p 1.l6an % recordkee 73.8% pers, 2008 285 233 -770 2,203 Account balances are net of unpaid loan balances. 401(k) plan accounts holding equities. On average, about two- HoldNo en,te: Sarah Thi, and Jack s publication Van wDerhe as updat i. 2ed 002. on “Can Nov 4 ember 01(k) Accumulations 28, 2022. Generate Significant Income for Future 40 partic 1(ki)pan plan ac ts’ current count >20 to 30 employ balanc 90,e 4ers 6 s4 ten . Re d9 to incre tir 5,9eme 68 nt sav as 11e 1,9wit 8 ing 2 h both s hel 137d ,04in age and 9 plans at 161,7 ten 94 prev ure 16ious em amo 5,785ng pl th 18o 1 e yers ,6c 26 ons or ist 2roll 0ent 8,53 ed 5gro ov u2 er i p 04of ,0nto 1 p 9 a irticip ndi 24v 8,id 6 an 9ual 2ts, as For all of 20 the figures in this report, components may not add to the totals presented because of rounding. 32.4 No te: Age and tenure groups are based on participant age and tenure at year-end 2019. The all category includes participants with missing tenure information. Account balances are participant account This system of classification does not consider the number of distinct inve2009 stment opti 256 ons presen206 ted to a given 431 participa 2,7nt, 18 50s 44.5% 15.9% 4.9% 6.9% 3.2% 9.6% 12.7% 31.1 5.0% 1.3% 68.1% permitting the analysis of the activity of participants in 401(k) plans of varying sizes—from very large 3% 4% 5% balances held in 401(k) plans at the participants' current employers and are net of plan loans. Retirement 2 savings held in plans at previous employers or rolled over into IRAs are not included. thirds of the consistent sample of 401(k) participants’ account 3 >30 174,198 181,446 203,665 249,292 289,526 291,457 314,552 354,777 342,082 408,090 retirement acc Retirees? ounts ” Inv (IRAs estment Com ) are not ip ncl any Institut uded in the e P ana ersly pe sctiv is. e To 8, explor no. 3, e the and f EB ull RI imIs pac sue Brie t of ong f, n oin o. g p 25articipatio 1 (November). n in they do in the cross-sectional EBRI/ICI 401(k) database. Younger parti 11% cipan 2010 ts or tho 265se with shorte 243 r job te 337nures at their 3,119 This number is lower than it would have been if it merely reflected employee turnover and retirement. For example, if 401(k) but rather, the 60s types of o3 ptio 9.6% ns presen 15.7% ted. Plan S 5.0% ponsor Co 8.6% uncil o4f Ame .9% rica 13202 .2% 0 indic 10.ate 7% s tha 1t in .2% 2019 1., 2% the avera 59.4ge % number 11% corporations to small businesses—with a variety of investment options. 10% Source: Tabulations fro 2m 01 EB 0 RI/ICI Partic 20 ip1 an 1t-Directed R2 et 0ire 12 ment Plan Dat 20 a 1 C3 o10% llection Pro2 je 0c1 t4 . 2015 2016 2017 2018 2019 Key Fin Tabl Ae ll dings of Contents : All 5 8,658 63,750 76,900 98,348 116,925 12011 22,963 14283 0,143 168,2 250 36 167,638-1 216,690 3,112 balances w$ ere 10M inves or leste sd in equities (Figure >$10 7 M )t. Su o $10 bdue 0M d stock More than $100M All plans Available at www.ici.org/pdf/per08-03.pdf and www.ebri.org/docs/default-source/ebri-issue-brief/1102ib.pdf. current 401(k) plans, employers and to ten ud ned de to rstand how have smaller 401(k acco ) plan unt balan participan ces, w ts h hi av le e tho farsed e ove who were o r an extld end er or ed per had lo iod, it is im nger job portant tenures to plan sponsors cha All Consistennge t their service providers, all participants in those plans would be excluded from the consistent sample. of investment fund options available for participant contributions was 19 among the more than 600 plans surveyed. 5 2012 303 282 357 3,495 Note: A Sge am an pld etenure groups are based on participant age and 7 tenure at year-end 2019. The group of participants 2 in1 t.he 8 ir 20s is not reported separately because of small sample size. The all market performance in 201 42.0% 1 was1 f 7ollo .4% wed by str 4.8% onger 7.growth 3% i 3.n 8 % 10.5% 11.8% 1.0% 1.3% 65.9% analyze a consistent group of participants (a longitudinal sample) who have been part of the database for an extended tended to M h ed av ian e higher account balances. For example, within the consistent group, among 401(k) participants with Plan Assets BrightS Sources a cope and In nd ves Type tment C s of ompany Data Institute 2021 reports an average of 28 investment options in 2018, and an average of 4 category includes participants with missing tenure information. Account balances are participant account balances held in 401(k) plans at the participants' current employers and are net of plan 27%2013 325 326 645 4,148 Introduction ................................................................................................................................ 23% .......................... 5 For the report on the year-end 2010 EBRI/ICI 401(k) database, see Holden et al. 2011. This paper provides an update of a longitudinal 23% analysis of 401(k) plan participants drawn from the EBRI/ICI 401(k) 2010 EBRI/ICI Ho lden, Sarah, and Jack VanDerhei. 2004. “Contribution Behavior of 401(k) Plan Participants During Bull and Bear 2012 lothro ans. Ret ugh iremen20 t sav1 in4 gs( he wit ld inh pa plans atrticularly st previous employer ron s or g rollea d pp overr eciation into IRAs are i non 20 t include 13 d. ); 31% pe morio re than d—in 10 thisto 20 years case, 2010 th of t rough enure 2019 at ye . ar-end 2019, older participants tended to have higher balances than younger 6 2014 349 366 278 4,406 21 investment options when a 16 target da .0 te fund suite is counted as a single investment option. 401(k) database 42.0% 11.1% 7.1% 11.6% 4.4% 10.3% 8.0% 2.9% 2.6% 62.0% database. Source So:ur IC ce: I t T a ab bul uat laio tins on fs ro m of EB U.R S. I/I C D I e Pp ara tic rt ip m an e t-D ntire of c tL ed a b Ro etr ire F m oen rm t P 5 la5 n 0 D0 at R a C eo slle ea ctrch ion P F ro ilje ec . t. 14.2 5 Markets EBR.” I/ICN I 4ati 01(onal k) DataT bax ase Association Proceedings, Ninety-Sixth Annual Conference on Taxation, November 13– Sample of Consistent 401(k) Participants, 2010 13.7 –2019 ........................................................................................... 6 growth then moderated in 2015, increased in 2016 and 2017, fell 2015 378 386 13.4 -1 4,377 Tenure refers to years at the current employer and is generally derived from date of hire reported for the participant. Tenure Several EBRI and ICI members provided records on active participants in 401(k) plans for which they kept participants: those in their thirties with more than 10 to 20 years of tenure had an average account balance of 12.0 Year-End 2019 21 Altogethe r, fro Cm onsyear istent S -end 2 ample 010 10 throu .4 gh year-end 2019, the average 401(k) plan account balance among the group of Lifestyle funds maintain a predetermined risk level and generally use words su 2016 ch as “co 399nservative, 391” “moderate,” o 335 r 4,741 15, 2003, Chicago: 44–53. Washington, DC: National 17 Tax Association. wi at the ll not refl end ec of 201 t the y 8, a ears nd incr of paeas rticipati ed in 20 on in the 401 19 (Figure 10). (k) plan if Thoug the 4 h01(k) pl an was added by the employer at a later date or if records for year-end 2010 through year Balanced Fu- ne dnd s 2019. These plan recordkeepers include mutual fund companies, $115,692, compared with an average of $143,707 for participants in their sixties with more than 20% 10 to 20 years of Age and Tenure of Consistent 401(k) Participants ................................................................................................ 6 7.5 7.5 Because the annual cross sections cover participants 22% with a wide range of participation experience in 401(k) plans, 2017 429 425 763 5,486 consistent participants more than tripled (increasing by 269 percent), rising 6.5 from $58,658 at year-end 2010 to “aggressive” in their name to indicate the fund’s risk level. Lifestyle funds generally are included in the non–target date 6.0 Figure 1 there contrib are re utions stric and tio ns on pa loan reprticipating in th ayments also pl e 4 ay a 01(k) pl role an in immedi the groately u wth pon hire. 5.2 2, 3 banks, insurance companies, and consulting firms. Although the EBRI/ICI 401(k) project has collected data from tenure (Figure 5). Among consistent participants in their sixties at year-end 2019, those with more than five to 10 years Non-Target- GICs2018 and 464 474 -251 5,207 meaningful analysis of the potential for 401(k) participants to accumulate retirement assets must examine the 401(k) 26% HoCons lden,ist Sarah ent Par , Jack Va ticipants Hav nDerhei, e Accumulat Luis Alonsed o, and Steve Sizable 401( n Bas k) P s. 2 lan011. Account “401(k Balances ) Plan Ass ................................ et Allocation, Account Ba .................... lances, 7 $2 balan 16,6 ced fund 90 at year category. -end 2019 (Figures 4, Con 5 sistent , and 6). Sample This trW anslat as Oes into lder Th aan compou Particip nd an antnual s average growth $10 rate 8,433 of 15.6 2.1 1.4 Equity Target-Date Date Balanced Bond Money Other Stable- Company Memo: of the average 401(k) plan account balances observed, the pattern 2019 499 519 1,074 6,256 1996 through 2019, the universe of data providers varies from year to year. In addition, the plans using a of 6 tenure had a lower average 401(k) plan balance ($133,398) than those with more than 30 years of tenure The consistent participants in their twenties w 1, 2 ere generally 29 years old at year-end 2019 2 and 20 years old at year4-end plan accounts of participants who mainta in the in EBRI/IC ed accounts I 401( o k)ver all Datab of ase theat years be 55% Year-End ing st 2019 udied (consistent participants). For percent over and Loa the n nine Act-ivity year Fun i d period. n 20 s 10 Fu.” nd Th sICI Re e mes di ear Fan undch account s Pers Fpe un bal dctiv s anc e 1 Fe u7 n, n amo ds o. 1 n Vg a0, luthis e F a und n consis ds EBRI Iss Stote cknt g ue Bri ro Otup also heref, n Un o. kgrew n 366 ow n , (D more Eqecem uities th ban er). Age Group 2020 N/A 24% N/A N/A 6,840 22 Changes in Consistent 401(k) Participants’ Account Balances .................................................................................... 9 of account balance growth rates from year to year also reflects the GICs are insurance company products that guarantee a specific rate of return on the invested capital over the life of the particular provider can change over time. Records were encrypted to conceal the identity of employers and ($408,090). Percentage 24% of participants by age, year-end 2010. -0.6 example, because of changing samples of providers, plans, and participants, changes in account balances for the entire -1.5 2021 N/A N/A N/A 7,725 20s Available at www.i 27.8% ci.org/pd 51.3f % /per17-1 5.0.p 7% df and 3. 0ww % w.e0br .9% i.org/docs 2.3%/default 6.2-% source 2/e .2%bri-iss 0ue .5%-brief/EB 83.6% RI_IB_12- qu adrupling from $22,965 in 2010 to $108,433 in 2019 (a compound annual average growth rate of 18.8 percent) -2.2 $82,234 Figure 3 18$81,491 1 s co toc ntract. k mark et performance. employees, but were coded so that both could be tracked over mul Toti tal ple years contributions . include For both e em ach part ployer and em icipa ployee n ct, data ontributions . Age of Participant Background Factors Influen 20% cing 401(k) Plan Assets ................................................................ -4.4 ................................ 11 database 30s are not a reliabl 36e .4 % measure 41.0% of how in 2.7di %vidual part 4.0% icipants 0.7% have 2far .8%ed. A 9 con .7%sistent 2.2% sample 0.6 i% s necess 82.8ary % to 7 (Figure 4). 20 11_No366_401(k)-Update.pdf. 2 Distribution of 401(k) Account Balances by Size of Account Balance The cross-sectional EBRI/ICI 401(k) database also shows that younger pT a ortic tal benef ipants a its disburs nd th ed include ose w both benef ith shorter tenu its paid directly from res ten trust funds and d to 20s 30s 40s 50s 60s $67,903 include date of birth, from which an age group is assigned; date of hire, from which a tenure range is assigned; 23 premium payments made by plans to insurance carriers. Amounts exclude benefits 40s 45.2% 30.3% 1.9% 5.3% 0.8% 4.2% 9.5% 2.1% 20% 0.7% 76.6% accurat Other stable v ely gauge alue f chan unds i ges, s nclude sy uch as growt nthetic GICs, h in ac whic count h co balances, e nsist of a portfol xperience io of fixed d by in-di inco vidme secu ual 401(k riti)es plan “wrappe particip d” wi ant th a s over Percentage of participants with account References .......................................................................................................................................................... 16 2011 2012 2013 215% 014 2015 2016 2017 2018 2019 Compound ha ve lower 401(k) balances than those who are older or have longer tenures. See Holden, Bass, and Copeland 2022. Changes in Consistent 401(k) Participants’ Acc $57ount Balances ,999 paid directly by insurance carriers . 9% 4% outstanding loan balance; funds in the participant’s investment portfolios; and asset values attributed to those 6% average 50s 43.8% 27.4%balances 2.6% in spec6i$ fi .9 5ed % 4,22ranges 2 0.9%, year6-.end 5% 2019 9.0% 2.2% 0.8% 67.9% Holden, Sarah, Jack VanDerhei, and Steven Bass. 2020. “What Does Consistent Participation in 401(k) Plans Generate? Am guaong rantee (typi the consis cally by tent g an ro ins up, u i ran ndiv ce co idumpan al 401(k y or a ban ) partici 10% k) to pan provide benef ts experienced it paymen a wide ra ts ng acco e of rding to outco the p mes, lan a often infl t boouenc k valed ue. by time. 3 13% Withdrawals and borrowing reduce 401(k) plan account balances in the EBRI/ICI 401(k) database, while loan This category includes interest, dividends, rent a,n net nua gains l or losses on sale of assets, 19 8 Notes ................................................................................................................................................................. 17 $43,877 In any given year, the Consisten cha t Samp nge in le in 2010 a partici EBRI/ICI 4 pant’s accou 01(k) Database nt in 20bal 10 ancCo e ns is a isten 22% c t S om ampbi le nation in 2019 ofE three BRI/ICI 401 factor (k) Data sba : se in 2019 Contributio funds. 60s An n aacc mounts an ount balanc 38 d co .2% ntributio e for each 28.4%n ra p tes tend art2 ici .5pan % to t increase with age is the 8.6% sum of 1.3%the parti an1 d ea 0.6cipan %rnings. Se t’s 7 ass .3% e Figures A3 and A4 in Brady ets i2n all .2% funds 0.9% . Plan balanc 58.1% an es d unrealized appreciation or depreciation of as grs oet ws th , and rate o,t her income and expenses. the relations Changes hip amo in 40 ng 1(k contr ) Pib lan utions, Account inves Batm lances, ent ret 20 urns, 10– an 201d8.” withdra ICI Re wsal earc or lo h P an ers act peictiv vitye . Partici 26, no. pa6, nts an w d ho EB w RI ere Issue repayment 24 has a positive impact. Withdrawal activity among active DC plan participants is relatively rare. Typically, 24% 2010–2019 Some recordkeepers supplying data were unable to provide complete asset a The bulk ollfoc thisati caton detail egory is net inv on certain poo estment gains or lossesled asset cl . asses 40% $34,160 All Consistent Bass are const 2021 or data tables in ructed as the In sum terna of l R all eve part nue icip Service, ant ba S lances tatistics o in the f Inpl coan. me Division 2022. A few key insigh Note: t Ts he c eme onsister nt ge fr sample io s 1m lo .3 milliono 4king 01(k) pla at the n participants 1. with3 ac cmi ount ll baio lann c ces at o thns e enistent d of each ye apart r from 2icipants 010 through 20 in th 19. Participe EB ant RI/ICI 401(k) 4 Brief, no. 514 (October). Available at www.ici.org/system/files/attachments/per26-06.pdf and younger or ha 5d fewer years of tenure experienced the largest percent incr Estimateas es thro es in ugh 201 av 9 are erage based o accou n the Departnt ment b oala f Labo nce r Fo b rmet 5500 wR een esearch $22,965 $26,909 26% fewer tha San 5 mplepete rce nurent of is tenure acti 4 2 a. s2 o % f ve DC the year-2 e p n 9d .1 ila n % din pa cated. rticipants tak 2.4% 6e .8 an % y with 1.0%drawal 6.in 9% a given 8.7 y %ear, w 2.2ith fe % we 0.r than 8% 2 p 68.3er % cent for o • ne or mor new contri e of their cl butions ients. The by the par fina ticipant l EBRI/IC (+) I 401(k) databa , the employer se includ (+), or b es only plans oth; for which at least 90 percent of all plan 25% File. Source: Tabulations from EBRI/ICI Parti$ c1 ip8 a,n 4 t3 -Dir 3 ected Retirement Plan Data Collection Project. data ba$ se 17,6o 86 v er the nine-year period from year $18,1- 2end 7 201 $16,70 to 32 year $16,8-3end 6 2019. $17,587 9 (*) = between -0.05 and 0.05 percent $17,132 $16,010 year-end 20 www.eb 10 and r$i.org 1 year 6,649/ docs -end /defau $ 15 12019 7,630 lt . F -sor ource/ example, ebri-iss the av ue-brief/ erage acc ebri_ib_ ount 514_lon balance g-k of -1oct20. 401(k) pdf particip . ants in their thirties 2019 EBRI/ICI At year-end 2019, 61 percent of non–target date balanced fund assets were assumed to be invested in equities (see 33% taking hardship withdrawals. Data from the EBRI/ICI 401(k) databas Ne o te: ind Daticat a exclude e that plans c1 ov8 ering percent only one part of icipant 401(k . ) plan assets could be identified. 1 • total investment return on account balances (±), which depends on the performance of financial markets and Investment A lOpti l 7indexesons are s et to 100 in December 2010. 401(k) database N/A = not available 42.1% 30.7% 3.5% 8.1% 1.0% 6.9% 5.2% 2.0% 0.5% 70.2% 2 rose 700.5 percent (a 26.0 percent compound annual average growth rate) between the end of 2010 and the end of Investment Company Institute, Quarterly Supplementary D EB ata). RI/ICI T 40he a 1(k) Dallta oc baatio se n to equities in target date funds varies with the The S&P 500 index measures the performance of 500 stocks chosen for market size, liquidity, and industry group representation. The tenur participane ts in compos plans off ition erin of tghe loans cons had istent loa sns outs ample a tandi lso was ng at roug year hly sim -en 37% d 20 ilar 19 to t , with he t the enure younges compos t (iti 8 on of percent 40 of 1(k ) 1on the allocation of assets in an individual’s account; and Sources: Investment Company Institute and Department of Labor. • The avera A target-date fund ge typic 4 ally 01 rebalanc (k) p eslan its po acc rtfolioount balanc to become less foe cusf ed or cons on growth ist and ent more fpartici ocused on pan incomts e ro as it appro se each aches and year passes fro the m 2010 target date o thro f the fund, ug h year- ICE BofA US Corporat 3 e Index. Atlanta: ICE Data Indices, LLC. Figures The ICE BofA US C35% orporate Index tracks the performance of US dollar denominated investment grade rated corporate debt publicly 2019 (Figures 5 and 6). Because younger participants’ account 5 balances tended to be smaller (Figur 20e 5), their funds’ target d which is usates. Fo ually included r target in the fund’ date f s name. unds, investors were as Cons sume istent S d to be i ample n a fund whose target date was nearest to their partici In pan thets EBRI in the /ICI 4 ir tw 0enties 1(k) d)ata anbase, in d oldestv ( est 14 ment o percent ptions ar of partici e gro pan up ts in ed into their e sixties) ight broad less c lategories. ikely to hav e Equ loans o ity fuuts nds tanding participants in 201 the 0 year 20-1en 1 d 2010 EB 2012 RI/ICI2 4 010 31(k) data 201b 4 ase. For 201 e 5 xampl2 e, 016 14 percen 201t of 7 the 2co 01nsis 8 tent sam 2019 ple had 28% 24% • withdrawals issue ( d i- n ) th , b e Uorro S domwi esting ( c mark-e) t, and loan . repayments (+). end 2019, with the exception of a slight decline in 2018. Overall, the average account balance increased at a 2 Not all participants are offered this investment option. Figure 1, Consistent Sample Was Older Than Participant16 s in the EBRI/ICI 401(k) Database at Year-End contr 65th birthday ibutions . produ Allocati ced on to sig e nquities i ificant perc n target date f ent growth un in ds the is assu ir account med to var balay with inv nces. In contr estor age. The ast, the ave equity porti rage account on was balance mo than re than cons thosist e 20 i of n t years pool heir Soed ut of rhirties, ce sinvest t : Yenur ahoo fF ment ort e inain nies, or f c 2010 e,s F p edrimarily era,l sim ifti Rese ers vilar e (Fig i Bnv anto t kest o ur f She 15 e 11). ed t. Lo in st uis, Ipe CEock In D rce atas the nt of , i Indinclu c data es the , adi ndbas n S p tg anartic d e, a partici e aq rduity mutua &ip Pants oor's. in the pan l t’s acco fu e nd nt s, b ire unt aEnk coll BRI/ICI balance ective trus 401(k is reduce ) ts, d in 20% 3 Internal Revenue Service, Statistics of Income Division. 2022. SOI Tax Stats: Individual Information Return Form W-2 compound annual average growth rate of 15.6 percent from 2010 to 2019, rising from $58,658 to $216,690 at GICs are guaranteed investment contracts. 2019 ....................................................................................................................................................... 5 of estimated us older No partici te: Acc in og the upan nt balts anindustry ce , or t s are phos arti ci av p e aerage nw t aith ccounlo eq t bnger t aluity percen ances henures eld in 401tage f (k) — plbot ans or ah o t t the a he pf aw rticihom te ssigned t pants' currended ntarget da emploto yers h anave te d a re fun l nar ed, w t oge f plar hich was calculated us n bal loana s. nces a Retirement the be t savings heldgi inn ing nin the g of The chan 4 ge in any individual participant’s 401(k) plan account balance is influenced by the magnitudes of these three the year life insuranc that the e s loa ep n arate is orig acco inated, unts, b and oth ut repaym er p ent oole of the d inves loan tmin ents the en . Simila suin rly, bon g years d fun contribu ds are tes to ac any pool count ed ac growth. count databaseEquit (Fi ies g ure 2) include equit . yT funds wen , cotm y- pany nine stoc kp , erce the equitnt of y portion the of target co -dat nsis e funds tent sam , and the equit ple y poha rtion d off no ive or n-target f -dat ewer e balanc years of ed funds. tenure in 2010, compared plaStat ns at p ist revics ious . Availabl employers or ro el at led ovww er intw.i o IRArs s a.gov/st re not incluatis ded.tics/soi-tax-stats-individual-information-return-form-w2-statistics. year-end 2019. 5 Morningstar Source:Lif Tabecycle Al ulations from lo EBR cat I/Iion CI Pa Ind rticipaexes (see nt-Directed Re Morningsta tirement Plan Datar 2 Co019). llection Pro ject. the study A peri sset allo od catiotha n by n age yo groun up isg am er w ong the ork cons ers istent or t samhos ple ofe 1.3 wit millioh n 401 sho (k) plan rter ten participant ures s with — accs ohowed mor unt balances at the e end mo of eac de h ys ear t perc from 201 e 0 nt g through ro 201 wth in 9. account 28% factors relative 12% to the starting account balance. For example, a contribution of a given dollar 24% amount produces a larger with 39 primarily perce int of nves p ted artic in bon ipants ds. in Balance the enti d fun re EBRI ds are poole /ICI 401(k d )a d cco ata unts invest base. ed in both stocks and bonds. They are Figure 2, Consistent Sample Had Longer Tenure Than Participants in the EBRI/ICI 401(k) Database at 24% • 6The median 401(k) plan 26% account balance for consistent participants increased at a compound annual average 11% The year-end 2010 EBRI/ICI 401(k) database represents 23.4 million 401(k) plan participants. s ize (Figure 6). For example, the average account balance of 401(k) participants in their sixties increased 181.8 percent 9% growth 10 rate when added to a smaller account than it would if added to a larger one. On the other hand, investment Inves clas tms ent ified Co into mpany I two subc nstitut atego e. Quart ries: targ erly L et ong da-te f Term und Mut s and ual Fun non– d targ Asset et Compos date balance ition.d fu Was nd hin s. A gto tar n, ge DC: In t date fun vestm d ent 7 For a deYear script -En ion o d 20 f th 19 e inve ................................ 8% stment options, see pa ................................ ge 15. ........................................................................ 6 The year-end 2019 EBRI/ICI 401(k) database represents 11.8 million 401(k) plan participants. 7% growth rate of 18.8 percent over the period, to $108,433 at year-end 2019. 6% 6% 5% 5% 5% ( As a e 12 xpect .2 percen ed, the t compoun consistent d a partici nnual avera pants ge who were growth follo rate) wed over between the year nine -end 2010 -year pe and riod year tend -e en d d to2019 have l . Invest ongerment tenures by returns of Com a gpan iven perce y Institute. ntag e produce larger dollar increases (or decreases) when compounded on a larger asset base. typically rebalances its portfolio to become less focus 4%ed on growth 4% and more 4% focused on income as it approaches Note: Funds include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. Age 4% 3%14% 3% 11 • The growth in account balances for consistent 3% participants g 13% enerally exceeded the growth rate for all 12% 10% 3% 2% See Holden, Bass, and Copeland 2022. 8 <0.5% 2% Figure 3, groDistr up is bas ib ed ution on the of partic 401 ipant's( age k) Account B at year-end 2019. Palances ercentages are by dollar-w Sizeight e of ed Account averages. Balance ................................ 2% ............................ 7 year returns -en, rath d 2019 er, compare than annua d wi l cth the ontributio broa ns, de rg b enerall ase ofy 401( accou k) p nt f artici or mos pant of ts in the the ch EBRI ang/IC e in ac I 40counts 1(k) data with baslarge e. Partici r balance pantss i . n In other words, growth rates are a function of the relative size of the dollar adjustment to the size of the individual and passes the target date of the fund, which is usually included in the fund’s name. Non–target date balanced Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. participants in the EBRI/ICI 401(k) database. Consistent Sample in 2010 EBRI/ICI 401(k) Database in Consistent Sample in 2019 EBRI/ICI 401(k) Database in 12 Investment Company Institute. 2022. “The US Retirement Market, First Quarter 212022” (June). Available at the consistent sample, by definition, had at least nine years of tenure in 2019 (the length of time for the longitudinal <$10,000 $10,000 to >$20,000 to >$30,000 to >$40,000 to >$50,000 to >$60,000 to >$70,000 to >$80,000 to >$90,000 to >$100,000 to >$200,000 acco See Ho unt. lden and Schrass 2022. Figure 4, fundsCo incl nsis udtent 401(k e asset all) ocat Participa ion or nts hybri Accumulate d funds, in Sig additio nificant n to l Accou ifesty nt Bal le funds. ances ................................ Company stock is equi...................... ty in the 8 2010 2019 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $200,000 Investment returns, which vary with 401(k) plan account asset allocation, also influence the changes in participants’ www.ici.org/research/stats/retirement. analysis), with none having five or fewer years of tenure, 6 percent having more than five to 10 years, 55 percent Note: The consistent sample is 1.3 million 401(k) plan participants with account balances at the end of each year from 2010 through 2019. Participant age 401(k) plan’s sponsor (the employer). Money funds consist of those funds designed to maintain a stable share Younger 401(k) participants or those with s Sizma e of 4ll 01er (k) year Plan Acc- oend unt Bal 201 ance 0 balances experienced higher percent 13 For statistics indicating the hi is age as of the year-egher nd indicapropensity of wi ted. thdrawals among participants in their sixties, see Holden and VanDerhei acco Figure 5, unts. Alth 401(ough k) Plan ass Acc et allo ount Bal cation vari ances A edmo with ng a Co ge nsis , and many tent 401(k partici ) Participants pants hel ................................ d a range of investments ........................... , stock market 9 22 23 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Bac pr kgro ice. Stable und vFac alue prod tors ucts Inf , such as GICs luencing 40 and 1(k) other Pl sta an ble Ass valuets e fun ds, are reported as one category. The growth in account balances compared with older participants or those with larger year-end 2010 2002. In addition, nonhardship withdrawals, which are generally limited to employees who are aged 59½ or older, constitute Morningstar. 2019. Morningstar Lifecycle Allocation Indexes (June). Chicago: Morningstar, Inc. Available at having perform more ance than tend s10 to to have 20 y an ears im, and pact on 38 tp hese ercent bal h anc avin es be g mo ca re than use, in 20 large part, years (Figure 401(k) 2). In plan p coartic ntras ipan t, in ts t’ bala he entir ncee s Figure 6, Changes in 401(k) Plan Account Balances Among Consistent 401(k) Participants ........................................ 10 other category is the residual for other investments, such as real estate funds. The final category, unknown, balances. Three primary factors affect account balances: contributions, investment returns, and withdrawal and loan Aggregate data on 401(k) plans provide insight into the possible influence of each of the factors that cause changes in a ma Not jo e: ri Ac ty of all w count balancesithdrawals (s are participant accouee Clark nt balances he202 ld in 402 1). (k) plans at the participants' current employers and are net of plan loans. Retirement savings held in plans at previous employers or https://indexes.morningstar.com/resources/PDF/upload/Morningstar%20Lifetime%20Allocation%20Summary_ tende EBRI/ICI d to 401( be wei k) d gh atabas ted toew iard n 2019, equit 44 ies. A perc ltogeth ent ofer, at participa year nts -end had 2019 five o , eq r f uities ewer— years equit of y fu tenur nds, th e, e equity 20 perce p nt h ortio ad n o mf ore rolled over into IRAs are not included. 24 consists of funds that could not be identified. activity. The percent change in average 401(k) plan account balance of participants in their thirties was heavily acco Sount balan urce: Tabulationces s from : contri EBRI/ICI Pa bu rticti ipaons nt-Dir, i ectenves d Retiretm mene t Pl nt retur an Data Colns, lectio and withdr n Project. awal or loan activity. Between year-end 2010 and year- Figure 7, Average Asset Allocation of 401(k) Plan Accounts by Participant Age ......................................................... 11 062419%20FINAL.pdf. than five to 10 years, 23 percent had more than 10 to 20 years, and 14 percent had more than 20 years. 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 Iss 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 Bri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri riA res ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef ef • • • • • • • • • • • • • • • • • earch rep J J J J J J J J J J J J J J J J June 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30 une 30, 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 , 20 ort from the E 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 22 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 • • • • • • • • • • • • • • • • • No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 562 62 62 62 62 62 62 62 62 62 62 62 62 62 62 62 62 BRI Education and R esearch Fund © 2022 Employee Benefit Research Institute 13 11 14 15 10 16 12 17 18 3 4 7 5 2 9 8 6