A recent study shared by the Investment Company Institute (ICI) found that 401(k) plans drive retirement savings, noting that nearly half of all Americans who have retirement savings in a 401(k) or similar plan say they probably would not save for retirement otherwise.
“Workplace retirement plans are essential to helping Americans save for their future, thanks to key 401(k) features like payroll deductions, a broad range of funds to invest in, and tax advantages,” said Shelly Antoniewicz, ICI Chief Economist. “These plans give Americans of all income levels the chance to invest and to control their investments. Policymakers should protect the successful retirement structure Americans value and continue to benefit from.”
Over 90% of DC-owning individuals said their employer-sponsored retirement account helps them think about the long-term, not just their current needs, and that payroll deduction features make it easier for them to save.
See also: 2 key strategies to boost employee retirement savings—now
Most Americans prefer retirement savings stay the course
The survey found that Americans show a strong interest in preserving the key features of DC plan retirement savings. In fact, 87% of those surveyed said they would oppose eliminating the tax advantages of DC retirement accounts, with similarly large majorities rejecting lower contribution limits or the loss of individual investment control.
A clear majority (79%) of respondents believe that the government should not control workers’ retirement assets, with opposition even higher (83%) among those who have retirement accounts. Overall, the findings indicate strong public resistance to any proposals that would limit retirees’ control over their defined contribution plan investments or how they manage their balances in retirement.
The survey makes clear that Americans view employer-sponsored retirement plans as an important part of the U.S. retirement system, even when they don’t currently benefit directly. According to the data, 78% of individuals whose households don’t own DC accounts or individual retirement accounts (IRAs) oppose removing tax advantages.
This strong support for retirement plan autonomy carries over to attitudes about retirees’ control of their assets. More than 90% of Americans agree that retirees should be able to make their own decisions about how to manage their retirement assets and income. Additionally, about three-quarters disagree that retirees should be required to annuitize a portion of their retirement accounts.
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