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Focus on Funds

Latest Data Show US Retirement Savers Holding Steady

US retirement account holders are holding steady on their investment contributions and strategies. In the July 20, 2018, edition of Focus on Funds, ICI Senior Director of Retirement and Investor Research Sarah Holden recaps ICI’s latest research findings.

Transcript

Stephanie Ortbals-Tibbs, ICI director of media relations: What’s going on with the American retirement saver and the broader American retirement savings market? ICI Senior Director of Retirement and Investor Research, Sarah Holden, constantly studies this area and dropped by to offer me some new highlights.

Sarah Holden, ICI senior director of retirement and investor research: So [in] Fact Book each year, the last chapter is devoted to looking at the retirement market. It really highlights the multipronged approach that we take in [ICI’s research department] to understanding that market.

So for example, we highlight that there’s $28.2 trillion [as of year-end 2017] earmarked for retirement. We also do a survey of IRA-owning households, and we find out why it is they made the decisions they made with their IRAs. We’re able to look at their asset allocations and their withdrawal decisions.

We also have a database of 401(k) plan participants, and we analyze their asset allocations and their account balances. And all of this is pulled together in Fact Book in one convenient place, really hitting the highlights of all these many strands of research.

Ortbals-Tibbs: So you have this nice big picture, a multidimensional view, based on last year’s data [from] the Fact Book. And then, yet your group continues to publish a tremendous amount of data this year.

Holden: So recently, we published from our recordkeeper survey. This is a survey of defined contribution plan recordkeepers, looking at more than 30 million accounts. It’s a survey we started back in 2008, sort of in the teeth of the financial market crisis, to keep track or keep an eye on how 401(k) participants were behaving as various market challenges or financial stresses came their way.

The most recent data looked at 2017, and on a few key metrics, we saw that theyreally stick to it. So they continued contributing; very few of them took withdrawals from their accounts. About one in five have a loan outstanding. And some of them—fewer than one in 10—rebalanced either their contributions or their asset allocations. And so it gives us a nice way to keep a finger on the pulse of how are 401(k) participants reacting to the market in the financial environment they’re facing.

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