Posted on 08 March 2009
By Mark Miller
Following up on my recent post about the relative importance of Wall Street to Main Street America, here’s an amazing factoid reported by the Center for Retirement Research at Boston College: for American households approaching retirement, just seven percent of wealth was in 401(k) or IRA accounts in 2007–before the market crash. That’s because of the cumulative missteps most retirement investors have made over their working lives, including lackluster participation rates, bad asset allocation decisions and too-frequent cash-outs along the way.
Here’s how American household wealth breaks out as of 2007, according to CRR:
The data is part of CRR’s Update on 401(k) Plans, which in turn is based on data from the Federal Reserve 2007 Survey of Consumer Finances; this particular statistic looks at households headed by an individual aged 55-64.
CRR notes that 401(k) vital signs actually have been improving since passage of the Pension Protection Act of 2006, which encouraged automatic enrollment and broadened investment options.