Study Confirms Americans Happy with 401k Plans

A recent study by the Investment Company Institute confirms Americans are happy with their 401k plans due to flexibility and control.

While the report does not specifically reference solo 401k plans, a solo 401k is a 401k but for the self-employed and I can tell you that our clients like their solo 401k plans because of control that they have to self-direct the solo 401k accounts into alternative investments such as real estate, metals, notes, tax liens, private equity, bitcoin as well as equities. They also like the flexibility of being able to borrow from their solo 401k plans through a solo 401k participant loan.

Here are some of the findings found in the study performed by Investment Company Institute:

  • Respondents are confident that 401(k) and other DC plans will help them meet their retirement goals.
  • Confidence was higher among households that currently own DC accounts or IRAs at 83%, but even 62% of non-owners expressed confidence in the DC system.
  • Respondents also strongly oppose changes to key DC plan features — and this was consistent even if they are not currently taking advantage of a DC account.
  • 88% of respondents disagreed that the government should either remove the tax advantages of DC plans, or reduce the amount that individuals can contribute to their DC accounts.
  •  85% of DC-owning individuals agreed that the “tax treatment of my retirement plan is a big incentive to contribute.”
  • When asked whether “knowing that I’m saving from every paycheck makes me less worried about the short-term performance of my investments,” nearly 80% of DC-owning individuals agreed with that statement. This finding ranged from 64% of DC-owning individuals with household incomes of less than $30,000 to 84% of those with household incomes of $100,000 or more.
  • Strong majorities of respondents disagreed with proposals to take away investment choices or control of account balances during retirement, further reinforcing the notion that participants strongly support retaining the structure of DC plans.
  • Respondents also largely agree that employer-sponsored retirement accounts help them think about the long-term, making it easier for them to save. Nearly half (49%) of DC-owning individuals agreed with the statement, “I probably wouldn’t save for retirement if I didn’t have a retirement plan at work.”
  • The 11th annual update of ICI’s survey includes the views of more than 2,000 American adults on DC retirement account saving, as well as their reactions to possible policy changes and their confidence in 401(k) and other DC plans.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

  • About MySolo401k

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