America at 250: How Workplace Retirement Plans Introduce Americans to Investing

America is a nation of investors, but how did that happen? Historical data highlight the key role that defined contribution (DC) retirement plans have played in broadening the investor base in the United States. In 2025, approximately 80 million US households—or about 60%—had DC plan accounts. These plans have introduced American workers not only to saving but also to investing.

First Mutual Fund Purchase Often Via Workplace Plans

In 2025, about 54%, or approximately 73 million US households, owned mutual funds. ICI asked survey respondents to think about the year that their household made their first mutual fund purchase and then whether that first mutual fund was purchased through a retirement plan at work. Nearly two-thirds (65%) of mutual fund–owning households reported that they had made their first mutual fund purchase through a retirement plan at work. Follow-up questions on the types of investment accounts that these households currently owned in 2025 clearly show that this first introduction supports expanding access to and investment in markets over time.

Among mutual fund–owning households that first purchased mutual funds through a retirement plan at work, 89% reported DC account ownership in 2025 (Figure 1). While 31% owned DC accounts exclusively, 69% indicated that they had branched out into other types of investment accounts—including one or more of the following: individual retirement accounts (IRAs), taxable brokerage accounts, or education accounts.

Many mutual fund–owning households introduced to mutual funds at work hold multiple investment account types. Nearly one-third (31%) of mutual fund–owning households introduced to fund investing at work indicated that they held both DC plan accounts and IRAs in 2025 (Figure 1). This likely reflects the lifecycle effect of changing jobs or retiring and rolling over retirement accumulations into IRAs. About one in six (17%) had taxable or education accounts in addition to DC accounts and IRAs. Another 6% had IRAs only and 3% had IRAs and taxable and/or education accounts. 

Figure 1: Branching Out Is Common Among First-Time Mutual Fund Investors in Workplace Plans
Percentage of mutual fund–owning households in 2025 whose first mutual fund was purchased through a retirement plan at work*

* Percentages do not add to 100% because of rounding.
Note: DC plans include 401(k), 403(b), 457, and other DC plans. IRA includes traditional, Roth, and employer-sponsored IRAs. Taxable accounts include brokerage accounts. Education accounts include 529 plans and Coverdell education savings accounts.   
Source: Investment Company Institute Annual Mutual Fund Shareholder Tracking Survey

DC Plans Build Savings and Investment Habits

DC account owners value the saving and investing features their DC plans provide. Nearly half (47%) agreed they probably would not be saving for retirement if not for their DC plans, 83% agreed their plan had a good lineup of investment options, and 82% said saving paycheck-by-paycheck made them less worried about short-term investment performance. In addition, 76% agreed that their employer-sponsored retirement plan provides useful educational materials about saving and investing in the plan. This foundation not only builds retirement nest eggs but also supports broader investing in capital markets.

DC plans offer participants the opportunity to save paycheck-by-paycheck in a variety of investment options, often including mutual funds ranging from equity funds to bond funds and target date funds.

The Next 250 Years

As America celebrates 250 years of ingenuity, innovation, and independence, employer-sponsored DC retirement plans deserve recognition for the role they have played in introducing millions of Americans to the habits of saving and investing. More than just retirement accounts, these plans give workers experience with paycheck-by-paycheck saving, diversified investment options, and the long-term discipline that supports financial security. As America looks to its next 250 years, DC plans will remain one of the most important ways Americans begin saving, learn to invest, and build lasting connections to capital markets.