2024 DC Retirement at a Glance

1. TARGETS FOR THE YOUNG – 401(k) plan participants in their twenties had an average allocation of 65.6% to target date funds through 2022, or more than double the average allocation of plan participants in their sixties. Younger participants also have a much higher exposure to equities (89.5%) compared with 57% for participants in their sixties. (Source: ICI)
 

2. STRONGER PENSIONS – The funding ratio for US corporate pension plans improved from 113.5% in April to 114.6% in May. A 3.4% increase in asset values fueled the improvement and was partially offset by a 2.4% increase in liabilities as discount rates fell by 15 basis points. (Source: Pensions & Investments)
 

3. SAVING LESS FOR RETIREMENT – Americans who are close to retirement have found it increasingly difficult to save for retirement due to rising inflation. 39% of near retirees surveyed have cut savings by an average of $4,065 since 2021 due to inflation. (Source: Boston College Center for Retirement Research)
 

4. SOUTH FOR RETIREMENT – The average annual cost of living is cheapest for retirees in West Virginia, Arkansas, and Mississippi at less than $35,000. Hawaii, California, and New Jersey have the highest average annual cost of living at more than $55,000. (Source: Lending Tree)
 

5. ALABAMA ALL ALONE – Since 2012, every state except Alabama has introduced or enacted legislation that would create state-facilitated retirement savings plans for workers without access to an employer plan. Over 80% of Americans say they would participate in these plans if they had access. (Source: National Institute on Retirement Security)
 

6. LESS GUARANTEED INCOME – Among current retirees, 72% say that their household receives enough income from lifetime-guaranteed income sources to fully cover their basic living expenses. Among working adults between the age of 50 and 75, however, just 47% expect guaranteed income to cover their basic expenses. (Source: LIMRA)
 

7. UNEVEN MATCHES – Between 2013 and 2022, the workers with the highest quintile of earnings accrued 44% of all matching contributions into 401(k) plans while workers in the bottom quintile received just 6% . (Source: Wall Street Journal)
 

8. BIPARTISAN SUPPORT – On 28 May, Senators Hassan (D-NH) and Budd (R-NC) introduced the RISE Act. The legislation would expand the tax credit to at least $2,500 for firms with less than 10 employees to cover startup and administration costs in setting up defined contribution retirement plans. (Source: Investment News)
 

9. MIND YOUR OWN BUSINESS – The Chamber of Commerce filed an amicus brief with Texas courts claiming the DOL’s new fiduciary rule conflicts with retirement benefits law and encroaches on the turf of other agencies like the SEC. (Source: Bloomberg Law)
 

QUESTION: The combined assets of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to have enough dedicated revenue to pay all scheduled benefits and associated administrative costs through what year? The answer can be found by calling an MFS representative.