The investment decisions of 401(k) plan participants with similar age and lifestyle characteristics vary widely, a new study by the Employee Benefit Research Institute shows. In its analysis of three large 401(k) plans, EBRI found a surprisingly high number of workers between 20 and 39 had not invested any retirement assets in equities.
EBRI also found evidence that workers appear to be following textbook rules by investing according to age-weighted time horizons. The percentage of participants with more than 80% of assets invested in non-equity options increased significantly and consistently with age.
As a result, EBRI researchers said basing plan design and policy on the ``average'' plan participant and his or her ``average'' asset allocation may be misleading, because there is significant variation in investment decision-making found at all life and career stages.