Covid didn’t change 401(k) saving habits, ICI says

Covid didn’t change 401(k) saving habits, ICI says
Just 2.3% of participants in defined-contribution plans stopped contributing to the plan in 2020 amid the pandemic.
FEB 25, 2021

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.

Latest News

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

Raymond James hauls Ameriprise advisors managing $1.1B in New York
Raymond James hauls Ameriprise advisors managing $1.1B in New York

Elsewhere, Sanctuary Wealth recently attracted a $225 million team from Edward Jones in Colorado.

Cetera debuts new alts allocation portfolios for accredited investors
Cetera debuts new alts allocation portfolios for accredited investors

The giant hybrid RIA is elevating its appeal to advisors with a curated suite of alternative investment models, offering exposure to private equity, private credit, and real estate.

Steward Partners expands in California with $1.1 billion RIA acquisition
Steward Partners expands in California with $1.1 billion RIA acquisition

The $40 billion RIA firm's latest West Coast deal brings a veteran with over 25 years of experience to its legacy division for succession-focused advisors.

Invictus managers withhold $10M, trigger ERISA asset showdown
Invictus managers withhold $10M, trigger ERISA asset showdown

Invictus fund managers allegedly kept $10 million in plan assets after removal, setting off a legal fight that raises red flags for wealth firms.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.