It Keeps On Ticking

If there ever was an example of “takes a licking, keeps on ticking” it would be the 401(k) system. Not only have investment returns recently been poor, but the media has piled on with story after story about how 401(k) itself is the problem. However, the real story is that 401(k) participants continue to save and invest in their plans even in what some term the worst of times. Those who do the recordkeeping for most of the 401(k) system continue to find stable rates of participation, savings and plan usage. Hardship withdrawals are up but are still being taken by less than two percent of participants. Maybe participants understand what naysayers don’t—that it’s important to save for retirement, and the best place for retirement saving is in a 401(k) plan where their employer is watching out for them.

David