Your 401(k) Plan May Provide a False Sense of Security
The 401(k) landscape is definitely improving. But with this improvement comes a new danger: Your plan may be giving giving you a false sense of security.
According to a report on 2013 defined contribution plan data, “How America Saves 2014,” recently published by Vanguard, more than 88 million Americans participate in defined contribution plans. The total assets held in these plans are in excess of $5.5 trillion. The data summarized in this report is both encouraging and depressing.
On the depressing side, the median participant account balance in 2013 was only $31,396. The average balance was $101,650. If you are a participant in a 401(k) plan with an average balance, and are depending primarily on your defined contribution investment to fund your retirement, you had better be prepared to live on $5,000 a year or less.
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