Only 2.3% of participants in defined-contribution plans stopped contributing to their 401(k) plans in 2020, according to record-keeper data gathered by the Investment Company Institute.
“That is consistent with activity in the majority of the prior 12 years for which ICI has tracked these data,” the trade group said in a release.
In 2019, for example, 2.3% of participants stopped contributing, as did 3.4% in 2009, another time of financial stress.
Withdrawals from DC plans remained at a low level last year, with 3.8% of plan participants taking withdrawals, which was similar to the 3.9% who did so in 2019 and 3.1% in 2009.
The withdrawals in 2020 did not include coronavirus-related distributions. The surveyed record keepers identified 5.8% of DC plan participants as taking CRDs during 2020. The Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, enacted March 27, 2020, provided increased flexibility for retirement plan savers, including penalty-free withdrawals, through Dec. 30 for individuals affected by COVID-19.
ICI said that about one in 10 DC plan participants changed the asset allocation of their account balances.
Investors' tendency to choose external goalposts can seriously impact their odds of long-term success – and they might not even know it.
“We fear that it will be ‘open season’ from the plaintiffs’ bar on plan fiduciaries who are early adopters of alternative investments,” said Tim Collins, a partner at Duane Morris.
Industry report shows that there are now fewer firms as consolidation intensifies.
The firms building now have a head start that will be very difficult to close. The ones waiting are accumulating a debt they may not be able to repay.
Global revenues hit record high in 2025 with sector growing at four times the rate of traditional financial institutions.
As $84 trillion prepares to change hands, advisors who treat estate planning as peripheral are quietly building a sieve, not a book.
In volatile markets, the advisors who win aren't the ones with the best calls - they're the ones whose clients stay the course.
