New research from the Investment Company Institute (ICI) has found that Americans highly value their 401ks and other similar retirement accounts.
In the report “American Views on Defined Contribution Plan Saving 2024,” researchers said nearly three quarters of Americans had favorable impressions of defined contribution plans like 401ks.
“Employer-sponsored DC plans have helped American workers achieve long-term saving goals for decades with favorable features like employer contributions, a strong lineup of investment options that are diversified and cost-effective, and tax-deferred growth. A vast majority—85 percent—of DC plan participants find that the tax treatment of their plans is a big incentive to contribute,” Sarah Holden, ICI Senior Director of Retirement and Investor Research, said. “It’s important when discussing changes to our retirement system for policymakers to note that current plans are working for millions of Americans. Most Americans, whether they currently have retirement accounts or not, have confidence in DC plans as they are and do not support any changes.”
The research found that Americans value their ability to save for retirement, and that they rely on the tax treatment to help them save. An overwhelming majority of respondents to the survey opposed taking away the tax benefits associated with DC accounts, reducing individual contribution limits to DC accounts, reducing employer contribution limits to DC accounts, not allowing individuals to make their own investment decisions in DC accounts, and government decision-making in where DC accounts can be invested.
The study found that 85 percent of American disagreed with taking away tax advantages. Additionally, 91 percent of respondents who owned 401ks or other DC accounts opposed or strongly opposed changing the contribution limits they or their employer can make to those accounts.
The research found that an overwhelming majority of DC plan participants said their plan helps them think about the long-term and makes it easier to save. Almost half also indicated they would probably not be saving for retirement if not for their DC plans at work.