The role of the retirement plan provider is changing. It’s no longer just about saving for retirement. Because of their access to plan participants, they need to accept the role of educator and communicator for retirement savings. To help plan participants respond to the economic challenges of recent years, successful plan providers and advisors will need to continue to expand their roles to provide a more holistic understanding of the entire retirement process, including subjects traditionally outside of their expertise, to help participants achieve their goal of a secure financial future.
Our new DC Participant Insights Series report examines Financial Behaviors and the Participant’s Mindset at a time of market caution, prolonged economic recovery and significant concerns over the political climate and government gridlock as it relates to meeting the country’s economic challenges.
Who is the DC plan participant? Our research finds the largest percentage (36 percent) is Gen Xers ages 36-51, followed by Baby Boomers ages 52-70. Millennials ages 35 and under comprise the third largest segment of DC plan participants (29 percent).
The majority of DC plan participants are women (56 percent). Tellingly, the gap in balances between genders increases with the plan balance. Women plan participants are more likely than men to have a balance between $50,000 and $99,999 (56 percent vs. 44 percent), while a larger percentage of men have higher balances as account balance increases. For example, men comprise the highest percentage of those with a balance between $100,000 and $349,999 (51 percent vs. 49 percent of women), $350,000 and $749,999 (62 percent vs. 38 percent) and $750,000 and up (67 percent vs. 33 percent)
Six-in-ten are married, while roughly one-in-five are single. Ten percent are divorced and the remained are living with a partner. Just over one-third of surveyed DC plan participants (35 percent) have a plan balance of over $100,000. Roughly one-fourth of DC plan participants overall report a plan balance $10,000 and $49,999, while 17 percent have an account balance of between $50,000 and $99,999.
Across all plan balances, married people are more likely than their single or non-married counterparts to comprise the largest percentage of participants in that account range. Among married plan participants with a plan balance of less than $10,000, 48 percent are married. Of those with a plan balance of between $10,000 and $49,999, 57 percent are married. Married plan participants comprise 62 percent of those with a plan balance between $50,000 and $99,999 and 68 percent a DC plan balance between $100,000 and $349,999. Three-fourths of those with a plan balance between $350,000 and $749,999 are married, as are 84 percent of those with a DC plan balance over $750,000.
Affluent investors overall rank education second only to hard work as the primary factors in their wealth creation. All of the DC plan participants surveyed are high school graduates while roughly 80 percent graduated from college. Twenty-seven percent went on to earn an advanced college degree. Across all plan balances, those with a plan balance of at least $750,000 are comprised of the highest percentage of college graduates (86 percent), the largest percentage (86 percent) have earned a college degree.
Sixty percent of surveyed DC plan participants are suburbanites, while 26 percent live in an urban city. Seven-in-ten plan participants live in two-income households. One participant works full-time in 27 percent of surveyed households. The top three occupations among plan participants with the highest plan balance (at least $75,000) are manager (17 percent), information technology (13 percent) and educator (10 percent).