401(k) Specialist Issue 1 - 2018 - 2

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401(K) ROLLOVERS
What Happened With IRA Balances, Contributions, Allocations And Withdrawals?
The Employee Benefit Research Institute is out with its latest measure of IRA account balances,
contributions, withdrawals and asset allocations.
EBRI examined trends in each category from 2010 to 2015 and contrasted the results of consistent
and inconsistent IRA account owners. Given recent broad-market performance and greater
awareness of retirement plans, the results are about what one would expect.
Account balances: EBRI reported that " results show significantly higher balances in the consistent
sample of IRA owners compared with the annual cross-sectional sample. "
Contributions: There were " considerable differences by IRA type in the likelihood of consistent
account owners contributing to the IRA and in the number of years contributions were made, "
according to the organization.
Asset allocation: EBRI reports that the percentage allocated to equities decreased from 45.7
percent in 2010 to 44.4 percent in 2011 before a sharp increase in 2012 to 52.1 percent. Subsequent
increases to 54.7 percent in 2013 and to 55.7 percent in 2014.
Withdrawals: Among consistent account owners, the percentage of individuals taking a withdrawal
from a Traditional or Roth IRA rose to 23.8 percent in 2015.
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401(K) EDUCATION AND ENROLLMENT
401(k) Trading Goes Haywire With Market Drop
We thought 401(k) participants were reacting better to market shocks and global news (which
is to say not at all)-we were wrong.
After relatively light trading in the face of such newsy events like Brexit, the Trump inauguration
and possible North Korean-driven nuclear Armageddon, and the potential market disruption they
brought, workers reversed course. The stock market drop caused almost 12 times the " normal "
level of trading activity, Alight Solutions reported.
The last time the Alight Solutions 401(k) Index recorded this level of trading was August 2011,
coinciding with the last time the S&P 500 saw its biggest single-day drop.
" We typically see a spike in trading activity when the market corrects, " explained Rob Austin,
head of research at Alight Solutions. " Many investors who spent the weekend hearing about how
the stock market posted its worst week in years were quick to make changes and sell some of
their equities. "
401(K) PARTICIPANT OUTCOMES
America's Trust In 401(k)s Soars
Over three-quarters of U.S. households are confident 401(k)s and other employer-sponsored
retirement plans will help them reach their retirement goals. Of those already investing in direct
contribution (DC) plans or individual retirement accounts (IRAs), confidence was even higher-a
whopping 84 percent.
A survey from the Investment Company Institute (ICI) revealed that, in particular, Americans
sing high praises for DC accounts. Half of those surveyed admitted it's unlikely they'd even be
saving for retirement at all if it weren't for such plans.
An amusing yet unsurprising twist: the tendency to overshare in the social media age has led to
bragging on Twitter and Reddit about just how much some people's 401(k) s have racked up.
2
Ashley Gonzales - Director of Digital
Marketing/Circulation
CONTRIBUTING WRITERS
Randy Fuss, Lynn Brackpool Giles,
Rebecca Hourihan, Mark Singer
ADVISORY BOARD MEMBERS
Roger Levy, Cambridge Fiduciary Services
Ann Schleck, Ann Schleck & Co.
Skip Schweiss, TD Ameritrade Institutional
Bill Thomas, ActiveETF Partners, LLC.
Bud Verfaillie, Victory Fiduciary Consulting
Ashley Verfaillie-Rosser, Victory Asset Management
Victory Fiduciary Consulting
Don Trone, Founder and CEO, 3ethos
OUR MISSION
401(k) Specialist is exclusively dedicated to
equipping retirement plan advisors with the
vision, specialized knowledge and cutting-edge
technology that are vital to their success in
a dynamic marketplace, in order to ensure
a secure retirement for hardworking
Americans through the 401(k).
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401(k) Specialist Issue 1 - 2018

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