The majority of 401(k) plan participants — 85% — enrolled to save for retirement, and nearly half expected their 401(k) plans to be their main sources of retirement income, according to an Investment Company Institute study.
About 61% of 401(k) participants had no investments in stocks, bonds, annuities or mutual funds other than those in employer plans, the 1998 ICI survey of 1,181 households showed. Roughly half had bank or thrift deposits, but no outside investments in stocks, bonds or mutual funds; and 11% of 401(k) plan participants have no assets outside their employers’ plans, the survey indicated.
The median account balance was a modest $14,000 because most participants had been in their 401(k) plans for a short time; the median tenure was four years. The median 401(k) participant contribution is 7%, and about 72% of account balances were allocated to equity funds.
