The average U.S. household invests about 55% of its 401(k) plan assets in common stocks, according to a survey by Watson Wyatt Worldwide. But almost 20% of working households allocated nothing to equities while more than 25% were entirely in stocks.
Several factors influence the equity investments, including education level and age status, according to Watson Wyatt. Households headed by someone with no high school diploma allocate 10 percentage points less to equities than someone with a high school diploma. Also, the average household headed by a 55-year-old allocates 6.5 percentage points less to equities than one headed by a 25-year-old.
The analysis is based on data of Watson Wyatts DC plan clients from 2004, the latest data available for the survey.