Who are these people who participate in a defined contribution plan through their employers?
Well, Spectrem is here to tell you.
Spectrem’s first report in its quarterly DC Participant series is Financial Attitudes and Concerns of Retirement Plan Participants. Studying the financial habits of investors with defined contribution plans of $10,000 or more, Spectrem identified who these people are based on age, gender and other considerations.
In terms of age, there is an even split at the age of 45, half above and half below. Almost 30 percent are under the age of 36, while 31 percent are over the age of 54.
The female-male split was 53 percent to 47 percent. Plan balances are split, with 37 percent owning balances between $10,000 and $49,000 and just over a third with balances of $100,000 or more. Three quarters of plan participants are married and another 8 percent are living with a partner.
Ninety-five percent of defined contribution plan participants have an annual income, and almost 80 percent receive investment income. Annual income comprises the largest dollar amount of income for the DC plan participants by a large margin. The average annual income is $128,000.
Almost half (46 percent) of defined contribution plan participants have retirement income, including Social Security and retirement distributions, with a mean annual value of $41,000.
Defined contribution plan participants are an independent lot, at least when it comes to making investments. Almost 60 percent consider themselves self-directed investors, meaning they make all of their investment decisions without the aid of a financial advisor. Thirty-percent classify themselves as event-driven investors, who do most of their own investing and contact an advisor only in case of big-ticket needs such as retirement planning or asset allocation advice.
Only 5 percent consider themselves advisor-dependent, allowing a financial advisor to make all of their decisions.
To learn more about the DC Participant, click here or contact Randy Wostratzky at firstname.lastname@example.org or 224-544-5195