Even in the wake of the recession, a recent report finds that workers have continued to contribute money to their employer-sponsored 401(k) plans, although they have changed their approaches.
A study by the Investment Company Institute and the Employee Benefit Research Institute found that more plan participants are using target-date funds to keep their employment strategy on track through their employee benefits. Last year, more than 60 percent of workers in their 20s had at least 80 percent of their 401(k) plan allocated to equity investments.
The study says this goes against the thinking that younger workers would be hesitant to put any of their money in the stock market following the events of the past several years.
"Growing use of target-date funds appears to be helping to keep younger 401(k) participants invested in balanced portfolios, with equity exposure to help their assets grow over the long term," said Sarah Holden, ICI senior director of retirement and investor research.
Overall, the two groups says the average account balance grew 3.4 percent compared to the previous year.
