A new study from Investment Company Institute (ICI) found that Americans continued to save for retirement through their 401(k) plans despite ongoing COVID-19 pandemic economic stresses.
ICI’s Defined Contribution Plan Participants’ Activities, First Half 2021 breakdown tracks contributions, withdrawals and other 401(k) activity based on defined contribution (DC) plan recordkeeper data addressing over 30 million participant accounts in employer-based DC plans at the end of June 2021.
“Despite the economic challenges over the past year and a half, retirement savers show deep commitment to preserving their retirement nest eggs,” Sarah Holden, ICI senior director of retirement and investor research, said. “The combination of ongoing contributions and few participants taking withdrawals reflects DC plan participants’ long-term mindset and preference to keep this money earmarked for retirement and avoid dipping into it.”
The study found most DC plan participants continued their path regarding asset allocations, with stock values generally rising during the first six months of the year. In addition, it revealed that DC plan withdrawal activity remained low during the first half of the year, similar to activity observed in the first half of 2020. Finally, the study indicated that DC plan participants’ loan activity declined in the second quarter of 2021. At the end of June 2021, 13.5 percent of DC plan participants had loans outstanding, in comparison to 14.3 percent at the end of March 2021.