ACCORDING TO a
report by the Employee Benefit Research Institute (EBRI), while 401(k) plan
ownership is rising, ownership of individual retirement accounts (IRAs) is
In an analysis of the period from 1992 to 2010, EBRI found
the share of American families with a member in any employment-based retirement
plan from a current employer increased steadily, from 39% in 1992 to 41% in 2007,
before declining to 38% in 2010.
Ownership of 401(k)-type plans among families participating
in a retirement plan more than doubled-from 32% in 1992 to 79.5% in 2007-and
increased again in 2010 to 82%. But the percentage of families owning an
individual retirement account (IRA) or Keogh retirement plan (for the
self-employed) declined, from 31% in 2007 to 28% in 2010. In addition, the
percentage of families with a retirement plan from a current employer, a
previous employer's defined, contribution (DC) plan or an IRA/Keogh declined,
from 66% in 2007 to 64% in 2010.
As in the past, EBRI found that retirement plan assets
account for a growing percentage of most Americans' financial wealth, not
including the value of their home. The median percentage of families' total
financial assets contributed by DC plan assets and/or IRA/Keogh assets
(assuming the family had any) increased from 2007 to 2010 and accounted for a
clear majority of these assets.
In fact, DC plan balances accounted for 58% of families'
total financial assets in 2007, and that share grew to 61% in 2010. DC and/or
IRA/Keogh balances increased their share as well, from 64% of total family
financial assets in 2007 to 66% in 2010.
However, EBRI said, the most recent data, along with other
EBRI research, indicate that few people are likely to be able to afford a
''Americans lost a tremendous amount of wealth between 2007
and 2010, and the percentage of families that participated in an
employment-based retirement plan and/or owned an IRA decreased, as well,"
said Craig Copeland, EBRI senior research associate and author of the report.
he added, the percentage of family heads eligible to participate in a DC plan
and who actually did so remained virtually unchanged during this time.
Therefore, Copeland said, despite all the bad news that resulted from this
period, one positive factor should be noted: "Those eligible to
participate in a retirement plan continued to participate, which may help
change the likelihood of a lower retirement standard for many Americans.” - Jill Cornfield
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