Home Viewpoints
TOPICS
401(k)
Bond Fund
Bonds
Commodity Investments
Corporate Bonds
Cybersecurity
Equity Fund
Equity Investing
Europe
Events
Exchange-Traded Funds
Federal Reserve
Financial Markets
Financial Stability
Fixed Income
Fund Governance
Fund Regulation
GMM
Global
Government Affairs
ICI Global
IDC
IRA
Index Fund
Interest Rate
International
Investment Education
Investor Research
Money Market Funds
Mutual Fund
Operations and Technology
Policy Research
Proxy Voting
Retirement Policy
Retirement Research
Savings
Shareholder
Target Date Funds
Taxes
Trading
Treasury
ARCHIVE
It’s 5/29—Are You Taking Full Advantage of College Savings Opportunities?
By Sarah Holden and Christina Kilroy
May 29, 2019
Saving for an education is an important financial goal for millions of US households. In fact, nearly one-quarter of mutual fund–owning households indicate saving for educational expenses is one of their goals for their mutual fund investments. An increasingly popular way to save for college is through 529 plans, named for the section of the tax code that provides for their favorable tax treatment.
There are two types of 529 plans: prepaid tuition programs and savings plans. States currently offer both of these types of plans. In addition, a group of nearly 300 private US colleges and universities offers a prepaid tuition program called the Private College 529 Plan, which allows investors to purchase discounted tuition at any participating college or university.
529 Plans Have More than $300 Billion in Assets
At year-end 2018, assets in both types of 529 plans totaled $311.1 billion, representing 13.8 million accounts. 529 savings plans have grown in popularity, holding $288.2 billion in assets at year-end 2018 on behalf of 12.8 million accounts (Figure 1).
Figure 1
529 Savings Plans Are Popular
Year-end 2018
Sources: Investment Company Institute and College Savings Plans Network
529 Plans Are Available in Nearly All States and Washington, DC
Nearly all states and the District of Columbia offer 529 plans (Figure 2). Some 529 plans are available through financial advisers and others are direct-sold plans. Some have residency requirements, while others are open to all US residents. It’s important to compare plans (this helpful tool shows state offerings side by side) and to consider additional tax advantages (such as a state tax credit or deduction, or matching grants) that may be offered to state residents.
Figure 2
529 Plan Assets by State
Year-end 2018
Sources: Investment Company Institute and College Savings Plans Network
See ICI’s FAQs on 529 Plans, where we have all of the above resources and more, including links to other helpful sites.
Sarah Holden is ICI’s senior director of retirement and investor research, and Christina Kilroy is vice president of the ICI Education Foundation.
Permalink: https://www.ici.org/viewpoints/19_view_529day
TOPICS: Investment EducationSavingsTaxes
2019 Investment Company Fact Book: Letter from the Chief Economist
By Sean Collins
May 7, 2019
Globalization has hit a few speed bumps in recent years, but it hasn't slowed the globalization of the Investment Company Fact Book. Consistent with ICI’s mission to represent the interests of regulated funds and their investors worldwide, Fact Book is expanding its international presence....
TOPICS: Financial MarketsFund RegulationGlobalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholder
ICI’s Quarterly Retirement Market Resource
By Miriam Bridges
April 23, 2019
ICI publishes statistics on the US retirement market every quarter as an information resource for mutual funds, individual investors, the media, policymakers, and researchers. This report includes individual retirement account (IRA) and defined contribution (DC) plan assets, including 401(k) plans, and mutual fund assets held in retirement accounts....
Mutual Funds: Rated E for Everyone
By Sarah Holden
December 12, 2018
Investing is subject to many misconceptions, including the notion that only wealthy households own mutual funds. As US households’ ownership of mutual funds has grown over the past four decades, the need to correct myths about who owns mutual funds has also grown....
TOPICS: Investor ResearchMutual FundRetirement PolicySavingsShareholder
Growing Better with Age: The 401(k) Turns Forty
By Miriam Bridges and Christina Kilroy
November 30, 2018
This month marks the fortieth birthday of the most prevalent retirement plan available to workers today: the 401(k). It’s a milestone, to be sure, but there are no mid-life doldrums here—401(k) plans continue to grow, and currently hold $5.3 trillion in assets on behalf of more than 55 million active participants and millions of former employees and retirees.
TOPICS: 401(k)Investor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholderTarget Date Funds
28 Trillion Smart Decisions
By Christina Kilroy
October 22, 2018
Have you ever done one small, smart thing that ended up making a huge difference in your future? I’m not talking about blind luck—like buying a ticket that turns out to be the winner in the (currently) $1.6 billion Mega Millions. No, I’m talking about small, smart decisions that can materially affect us later in life....
TOPICS: Investment EducationMutual FundRetirement ResearchSavingsShareholderTaxes
Stock Ownership in the United States: It’s Main Street
By Sarah Holden
September 10, 2018
US household activity in the stock market has undergone a transformation over the past three decades. The old idea that investing in the stock market is just for the wealthy is vastly out of date.
In the late 1980s, less than a third of US households held stocks. Now, a majority do. This growth in stock-owning households has occurred across all income quintiles....
TOPICS: Equity InvestingInvestor ResearchRetirement PolicySavingsShareholder
Popular 529 Savings Plans Expand to Reach Students of All Ages
By Christina Kilroy
May 29, 2018
Today, on May 29—“5/29”—we mark 529 College Savings Day. Many people interested in saving for a child’s or grandchild’s future college costs are using targeted savings vehicles called 529 savings plans. The plans, which have grown in popularity over the past decade and a half as a way to save for a family member’s college expenses, may now also be used to cover tuition for elementary and secondary education....
TOPICS: Investment EducationSavingsTaxes
2018 Investment Company Fact Book: Letter from the Chief Economist
By Sean Collins
May 15, 2018
Those of us who wear glasses know that one of the most crucial elements in seeing the world is the right lens. A bad lens warps the light and distorts the signals; the right lens sharpens the image and enhances our understanding.
This is a useful metaphor for the work that ICI Research does in providing informed analysis to guide public policy. Through our voluminous collections and surveys, we gather large amounts of data—signals about the behavior of funds, markets, and investors. But finding the patterns in these signals requires the right lens—accumulated knowledge provided by context, economic insights, and understanding of institutions.
The Investment Company Fact Book is one very visible result of this process and its many elements...
TOPICS: Financial MarketsFund RegulationInvestor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholder
A More Accurate Evaluation of Retirement Plan Participation
By Miriam Bridges
May 2, 2018
What’s the actual participation rate of Americans preparing for retirement through a workplace retirement plan? It’s an important question, and one that ICI economists Peter Brady and Steven Bass shed some light on in their new analysis of tax data, “Who Participates in Retirement Plans, 2014.”
The retirement plan participation rate—often used to evaluate the performance of the US voluntary employer plan system—understates the true scope and importance of these plans. In their careful analysis, Brady and Bass give two reasons for this understatement...
TOPICS: Retirement PolicyRetirement ResearchSavingsTaxes
Invest in Your Future Through an IRA
By Christina Kilroy
March 13, 2018
Nearly 44 million US households invest and save for their future through individual retirement accounts (IRAs). If your household isn’t one, now is a great opportunity to join them. And if you are already saving in an IRA, there are some advantages that you may not be aware of—and that are worth knowing about as Tax Day approaches...
TOPICS: Investment EducationMutual FundRetirement ResearchSavingsShareholderTaxes
Americans Rely on Stocks to Meet Their Financial Goals as Much as Ever
By Sean Collins
January 17, 2018
The following ICI Viewpoints is a letter to the Wall Street Journal by Sean Collins, ICI chief economist, in response to an article published on January 4, 2018:
Are America’s individual investors missing out on one of the biggest bull markets in history? No. The Wall Street Journal’s account (“As Dow Tops 25000, Individual Investors Sit It Out,” January 4) is based on anecdotes and selective use of data.
TOPICS: Exchange-Traded FundsFinancial MarketsFinancial StabilityMutual FundSavings
States Are Abusing Abandoned-Property Funds to Plug Budget Shortfalls
By Tamara K. Salmon
January 11, 2018
Imagine finding out that your investment account has been turned over to your state because it was considered “abandoned.” Imagine, too, that after the account was turned over to the state, the account received a capital gains distribution. As a result, you are liable for paying the taxes on that distribution—and can be assessed monetary penalties for not paying the taxes in a timely fashion.
TOPICS: Fund RegulationGovernment AffairsMutual FundRetirement PolicySavingsShareholderTaxes
Autumn Air, Playoff Baseball, and…National Retirement Security Week
By Christina Kilroy
October 17, 2017
The baseball postseason is well underway and the air has finally turned crisp. Perhaps that’s why—as we’re marking National Retirement Security Week—our thoughts have turned to the words of Yogi Berra, the great New York Yankees catcher. He was credited with so many pithy, wise, and witty sayings that, in classic Berra style, he remarked, “I really didn't say everything I said.”
TOPICS: 401(k)Investment EducationMutual FundSavingsShareholderTaxes
In Reality, Data Tell a Different Story of Old Age in America
By Sarah Holden
October 10, 2017
“The New Reality of Old Age in America” (September 30) portrays economic security in retirement by pairing anecdotes about workers who have fared poorly with selected statistics. Comprehensive data on how our system is working overall tell a far different story: America’s retirement system enables most of today’s retirees to maintain their standards of living.
TOPICS: 401(k)Investor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholder
A 529 Day Primer: Do You Know What State Your College Savings Plans Are In?
By Christina Kilroy
May 26, 2017
You might not know that May 29 is 529 College Savings Day, or even what a Section 529 plan is. But if you’re a parent or grandparent concerned about future college costs, the day presents an opportunity to learn how 529 savings plans can help you plan for—and pay for—your loved ones’ postsecondary education expenses.
TOPICS: Investment EducationInvestor ResearchMutual FundSavings
Scratch That: Why Arguments of a Broken Retirement System Are Misguided
By Peter J. Brady
April 6, 2017
What if you were given the task of designing a retirement system from scratch? In a recent paper, New York University law professor David Kamin proposes a retirement system that combines a mandatory savings floor with tax incentives to encourage savings above the mandated minimum. He is not the first to propose a new mandatory retirement plan, with others proposing that either employers be required to offer a plan or workers be required to contribute to a plan.
TOPICS: 401(k)Investor ResearchMutual FundRetirement PolicyRetirement ResearchSavings
ICI Staff Take Local Students on an “Investing Road Trip”
By Christina Kilroy
March 31, 2017
Among the eighth graders who walked into Junior Achievement’s Finance Park were an aspiring filmmaker, a model, and a sports agent. But for their daylong budgeting simulation—where each student is assigned an age, family, debt, credit score, job, and salary—they would transform into an auto mechanic, an insurance agent, and a bus driver.
Exemptions from Investor Protections Put California Savers at Risk
By Paul Schott Stevens
March 22, 2017
The following ICI Viewpoints is a letter to the editor by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an editorial published on March 8, 2017, in the Los Angeles Times.
TOPICS: 401(k)Investor ResearchMutual FundRetirement PolicyRetirement ResearchSavingsShareholder
ICI Study: 55 Million US Households Own Mutual Funds
By Sarah Holden
February 24, 2017
Gathering and analyzing data about how shareholders purchase and use mutual funds are critical to ICI’s work to facilitate sound, well-informed public policies affecting funds, their investors, and the retirement markets.
TOPICS: 401(k)Investor ResearchMutual FundRetirement ResearchSavings
For “401(k) Pioneers,” No Reason for Regrets
By Paul Schott Stevens
January 10, 2017
The following ICI Viewpoints is a letter to the Wall Street Journal by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an article published on January 3, 2017.
Dear Editor:
It may be, as you report, that “401(k) Pioneers Lament What They Started” (Page A1, Jan. 3). But the facts are clear: America’s retirement system is stronger today, in the expanding 401(k) era, than it was when defined benefit pensions were the primary vehicle for retirement savings.
TOPICS: Investor ResearchMutual FundRetirement PolicyRetirement ResearchSavingsShareholder
Secure Choice Is Risky for Workers and for the State
By Paul Schott Stevens
August 17, 2016
Millions of Americans save for retirement using employer-sponsored plans that offer tax advantages and excellent investment options.
TOPICS: Government AffairsMutual FundRetirement PolicySavings
Three Reasons Why You Should Consider an IRA
By Sarah Holden
March 8, 2016
April 18 is the deadline to file income tax returns with the federal government this year.
TOPICS: Investment EducationMutual FundSavingsTaxes
Getting Started in a 401(k) Plan—and Getting the Most Out of It
By Christina Kilroy
February 26, 2016
This week, ICI and the Investment Company Institute Education Foundation (ICIEF) joined thousands of corporations, nonprofits, and government agencies to celebrate America Saves Week.
TOPICS: 401(k)Investment EducationInvestor ResearchRetirement ResearchSavings
Correcting a Distorted Picture of Retirement Resources
By Peter Brady
October 21, 2015
Can 401(k) plans and individual retirement accounts (IRAs) provide the income that retirees need to supplement Social Security and enjoy a secure retirement?
TOPICS: EventsGovernment AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavings
Small Savers at a Loss
By Brian Reid and Sarah Holden
September 25, 2015
As ICI has pointed out before, the proposed rule from the Department of Labor (DOL) to redefine what counts as a fiduciary relationship in the retirement market is fundamentally flawed. But it is no less flawed than the DOL’s justification for it—a Regulatory Impact Analysis that fails to demonstrate a market failure that supports the need for such a sweeping and costly rule.
TOPICS: Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavings
Fresh Perspectives on a Changing World
By Miriam Bridges
May 29, 2015
Implications of globalization, the impact of the Millennial Generation on product development, the search for alpha in a world full of passive products—these were among the top priorities and concerns of the fund industry discussed by a panel of industry leaders at ICI’s 57th annual General Membership Meeting (GMM), held May 6–8 in Washington, DC.
TOPICS: CybersecurityFund RegulationGMMICI GlobalMutual FundSavings
Opinion: The Tax Threat to Your Mutual Fund
By Mike McNamee
May 7, 2015
Vanguard Chairman and CEO Bill McNabb sent “an open letter to all mutual fund investors” in the opinion pages of Thursday’s Wall Street Journal. His message: fund investors face a clear threat of higher costs, weaker returns, and a bailout tax to salvage other failing financial institutions—all if regulators get their way in imposing new rules on funds or their managers.
TOPICS: 401(k)Federal ReserveFinancial MarketsFinancial StabilityFund RegulationMutual FundRetirement PolicySavingsShareholderTradingTreasury
On Fiduciary Rule, New York Times Relies on Fatally Flawed Research
By Paul Schott Stevens
April 8, 2015
Today I submitted the following letter to the editor of the New York Times:
TOPICS: 401(k)Fund RegulationInvestment EducationRetirement PolicySavingsShareholder
What’s Driving Retirement Plan Access?
By Peter Brady
October 17, 2014
Most workers who are likely to have the ability to save and who are focused primarily on saving for retirement have access to an employer-sponsored retirement plan—and nearly all of these workers choose to participate.
TOPICS: Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavings
Statement of the Investment Company Institute at Senate Finance Committee Hearing on “Retirement Savings 2.0: Updating Savings Policy for the Modern Economy”
By Brian Reid
September 16, 2014
This statement was given on behalf of ICI by Brian Reid, chief economist, at the Senate Finance Committee’s hearing on “Retirement Savings 2.0: Updating Savings Policy for the Modern Economy.” For more information, see ICI’s full written testimony.
TOPICS: 401(k)Government AffairsInvestor ResearchMutual FundRetirement PolicyRetirement ResearchSavingsTaxes
Happy Birthday ERISA! Congratulations on 40 Years
By Sarah Holden and Elena Barone Chism
September 2, 2014
Today marks the 40th birthday of the Employee Retirement Income Security Act (ERISA). Signed into law on September 2, 1974, ERISA introduced bold steps to safeguard Americans’ employer-sponsored pensions and created the individual retirement account (IRA). Assets earmarked for retirement totaled $0.4 trillion at year-end 1974 (see the figure below). At this modest start, private-sector defined benefit (DB) plans accounted for 35 percent of the total; federal, state, and local plans for 34 percent; private-sector defined contribution (DC) plans for 17 percent; annuities for 13 percent; and there was a mere glimmer of IRA assets by year-end. Currently, total U.S. retirement assets are $23.0 trillion, and their composition has shifted considerably over the past 40 years.
TOPICS: 401(k)Fixed IncomeGovernment AffairsInvestment EducationInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavingsTaxesTreasury
Unconventional Wisdom on Retirement Preparedness
By Peter Brady
August 4, 2014
How well are Americans planning and saving for retirement? This is an important question to answer—but also vexingly difficult.
TOPICS: EventsGovernment AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavings
The Real Lessons to Be Learned from 1994’s Bond Market
By Brian Reid
July 29, 2014
A recent “Heard on the Street” column in the Wall Street Journal (“Heeding 1994's Bond-Market Lesson,” July 27, 2014) is correct in saying that there’s a lesson to be learned from the 1994 bond market—but it draws the wrong lesson.
TOPICS: Bond FundBondsFederal ReserveFinancial MarketsFinancial StabilityFixed IncomeFund RegulationInterest RateMutual FundRetirement ResearchSavingsTradingTreasury
Some Facts About Roth IRAs and the Investors Who Use Them
By Todd Bernhardt
July 17, 2014
Since the individual retirement account (IRA) was created as part of the Employee Retirement Income Security Act of 1974 (ERISA), it has become a resounding success, accounting for the largest pool of assets in the U.S. retirement market. By the end of 2013, Americans held $6.5 trillion in IRAs, with 45 percent of that total—$3.0 trillion—invested in mutual funds.
TOPICS: Bond FundEquity InvestingFixed IncomeInvestment EducationInvestor ResearchMutual FundRetirement ResearchSavings
Industry Leaders Address Evolving Industry Challenges and Opportunities
By Miriam Bridges
June 9, 2014
In conversations exploring outcome-oriented investing, the globalization of the fund industry, and the next generation of retirement plans, industry leaders offered their perspectives on serving investors in an evolving world during several insightful sessions at ICI’s annual General Membership Meeting, held in Washington May 20–22.
TOPICS: 401(k)EventsGMMInternationalMutual FundRetirement PolicySavingsShareholder
GMM Policy Forum: BlackRock’s Larry Fink Speaks with ICI’s Paul Stevens
By Todd Bernhardt
May 21, 2014
The fund industry needs to stop focusing on the moment and start focusing on outcomes when advising investors on their resources, said Laurence D. Fink, chairman and CEO of BlackRock, at ICI’s Annual Policy Forum, part of the Institute’s 56th General Membership Meeting (GMM).
TOPICS: 401(k)BondsEventsFinancial MarketsFund RegulationGMMInternationalInvestment EducationMutual FundRetirement PolicySavingsShareholderTreasury
Washington: Put Your (Retirement) Money Where Your Mouth Is
By Mike McNamee
March 4, 2014
When President Obama announced a new effort to expand access to retirement savings opportunities, ICI was among the first to applaud. The Administration’s “myRA” looks to provide a new option for Americans who want to put money aside for retirement, but who might not have access to a retirement plan through their workplace. These accounts would complement the wide array of investment options already available to these workers.
TOPICS: 401(k)Government AffairsInvestment EducationRetirement PolicySavingsTaxes
America’s Retirement System Is Strong
By Sarah Holden
December 18, 2013
One year ago, ICI released its landmark study, The Success of the U.S. Retirement System, a compilation of research from a wide range of sources, which found that the country’s retirement system is fostering economic security in retirement for Americans across all income levels.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
ICI’s Guide to Avoiding a Common 401(k) Tax Trap
By Mike McNamee
December 9, 2013
A tax trap for retirement savings is catching many smart people unaware. If allowed to go unchecked, it could harm the retirement savings of millions of Americans. A columnist for the Washington Post was just the latest in a long list of victims.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
Yes, DC Follies Hurt Retirement Savers—But Let’s Not Overstate
By Brian Reid
October 10, 2013
“Debt ceiling follies” certainly do put retirement savers and their assets at risk. On that, ICI agrees with a recent Washington Post blog.
TOPICS: 401(k)Financial MarketsMutual FundRetirement ResearchSavings
Revenue Estimates of Restricting Tax Deferral: It Ain’t Necessarily So
By Peter Brady
September 20, 2013
Fifth in a series of posts about retirement plans and the policy proposals surrounding them.
In previous Viewpoints posts, I explained that retirement contributions are neither tax deductions nor tax exclusions, but rather are tax deferrals. I also explained why, in my opinion, the two most prominent proposals to restrict qualified deferred compensation are flawed (post three and post four).
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
Tax Reforms Should Not Favor DB Plans over DC Plans
By Peter Brady
September 19, 2013
Fourth in a series of posts about retirement plans and the policy proposals surrounding them.
In The Tax Benefits and Revenue Costs of Tax Deferral and in two previous Viewpoints posts (post one and post two), I explained the benefits that workers get from deferring tax on compensation set aside for retirement.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
A ‘Modest’ Proposal That Isn’t: Limiting the Up-Front Benefits of Retirement Contributions
By Peter Brady
September 18, 2013
Third in a series of posts about retirement plans and the policy proposals surrounding them.
In two previous Viewpoints posts (post one and post two), I explained the benefits that workers get from deferring tax on compensation set aside for retirement.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
Marginal Tax Rates and the Benefits of Tax Deferral
By Peter Brady
September 17, 2013
Second in a series of posts about retirement plans and the policy proposals surrounding them.
In a previous Viewpoints post, I discussed the difference between tax deferral—the tax treatment applied to retirement savings—and tax deductions and exclusions, such as the mortgage interest deduction or the exclusion of employer-paid health insurance premiums from income. The difference is often overlooked or misunderstood, leading to inaccurate analysis and harmful policy proposals.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
Retirement Plan Contributions Are Tax-Deferred—Not Tax-Free
By Peter Brady
September 16, 2013
First in a series of posts about retirement plans and the policy proposals surrounding them.
In today’s fiscal and political climate, taxes are never far from politicians’ minds. Whether to achieve comprehensive tax reform or to raise revenue to meet budget deficits, members of Congress are now considering changes to a range of tax code provisions—including those governing retirement policy. Any comprehensive effort to address fiscal policy or tax reform should examine every option, but some discussions of retirement policy have been misguided. The tax treatment of retirement savings—tax deferral— too often has been lumped together with tax deductions (such as the deduction from income of mortgage interest expense) and tax exclusions (such as the exclusion from income of employer-provided health insurance premiums).
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
CAP Claims About the 401(k) System Are Misguided
By Paul Schott Stevens
September 4, 2013
The concerns of the Center for American Progress about the 401(k) system (covered August 20 in “A Better Way to Save for Retirement?”) are mistaken.
TOPICS: 401(k)Retirement PolicyRetirement ResearchSavings
GMM Panelists Discuss Retirement Savings and Financial Education
By Miriam Bridges
May 17, 2013
Americans need greater access to savings vehicles and better financial education to help ensure that they use them effectively, fund industry experts told attendees at the 55th Annual General Membership Meeting.
Copyright © 2019 by the Investment Company Institute