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401(k) Accounts Increase Personal Wealth

Posted on Oct 16, 2012 by  in 401(k) Retirement Planning, In the News, Retirement Readiness


The title of this post probably sounds like a statement of the obvious to many who read this blog.  Even so, I recommend you read a recent EBRI article that discusses an EBRI Issue Brief that analyzes information from the Survey of Consumer Finances.  In my opinion this information provides clear support for the value of employer-sponsored retirement plans, specifically defined contribution plans.  Since 401(k) plans comprise the majority of defined contribution plans today, this data further demonstrates that 401(k) plans are indeed a valuable tool to prepare people for a successful retirement.  

A statement that is most significant, as it establishes that these plans do not benefit merely the wealthy, is that “…the median household wealth for a family with annual income of less than $25,000 that had an individual account retirement plan was $118,000, while the median household wealth for a family in the same income category, but with no individual retirement account, was $5,800.”

This report analyzes data from 2010.  I think that it is safe to assume that the numbers can only have improved since then.  Our legislators and regulators should be doing whatever they can to encourage and improve upon the success of the current private retirement system.

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