Wallet1000

State of the 401(k)

401(k) Stats and Charts

Retirement savings is a critical component of a household's overall financial wellness and the 401(k) plan is one of the predominant ways that Americans save for retirement. We wanted to take a closer look at the continued growth of the industry and were able to do so by using the Form 5500 Datasets from the U.S. Department of Labor.

Assets

Annual Plan Assets by Year

Assets in 401(k) plans totaled $7,787,550,424,498 for 2023. There were 733,512 401(k) plans.

2023 Retirement Plan Assets by State

The five states with the most 401(k) assets are:

  1. California
  2. Texas
  3. New York
  4. Illinois
  5. New Jersey

Annual Plan Count by Plan Size

Over half (54%) of all 401(k) plans have less than a million in assets. 85% have less than $5 million in assets.

2023 Plan Count by Plan Size

California has the 122,971 401(k) plans which is more than double New York in second place with 51,890.

The District of Columbia has the highest ratio of large plans, with 1.77% of plans there having more than $100 million in assets. Illinois and Minnesota report 1.41% and 1.46% of plans in that range, respectively.

Annual Average Plan Size

The median plan assets are $674,616 which reflect the majority of plans having less than a million in assets. The average assets in a 401(k) plan is $11,162,274 (16.5x the median assets).

2021 Top 1% of Plans

Assets are concentrated in the largest plans with the top 1% of plans holding 74% of all assets.

2021 Top 0.01% of Plans

The top 1% of the top 1% (63 plans) hold 19.8% of all assets.

Participants

2023 Assets by Plan Size (Participants)

Assets are concentrated in large plans with plans of over a thousand participants being just 1.15% of plans yet holding 74% of all assets.

2023 Accounts by Plan Size (Participants)

Accounts are similarly concentrated in large plans with 67% of accounts in 1.15% of plans.

2023 Plan Size by Participants

Nearly 92% of plans have 100 or less participants yet the average plan has almost 104 participants.

Annual Average Participant Account Size

A better measure of the retirement account health of Americans would be median 401(k) assets by age but the Department of Labor does not have that underlying data available. The median balance is certainly much less than the average balance shown below.

According to the U.S. Bureau of Labor Statistics the median age of workers in the U.S. is 42.

Fees

The vast majority of plans did not report fees as a Schedule C is only filed if a service provider is paid $5,000 or more. Thus, the below metrics only reflect the plans that did report.

2023 Advisory Fees

The fact that larger plans tend to be fixed fee is reflected in the average advisory fees.

Annual Advisory Fees: By Assets

The average advisory fees are a poor metric as they reflect the total fees divided by the total assets--for every dollar in 401(k) assets the advisory fees are 2bps. They do not reflect the average fees that a plan or participant pay.

The median fees are the advisory fees that the median 401(k) plan pays.

2023 Recordkeeping Fees

The scale of large plans allows them to pay less in recordkeeping fees both as a percentage of assets as well as per-participant.

Annual Recordkeeping Fees: By Assets

The average cost for recordkeeping has been hovered around 5 bps for the past eleven years while the median cost has risen sharply over the past six.

Annual Recordkeeping Fees: Per Participant

This is a somewhat counterintuitive as fees trend down across the industry. It comes from market performance from 2009 to 2021--and the corresponding gross increase in asset-based fees--versus the smaller increase in number of participants.

Service Providers

2021 Top Recordkeepers

Of the plans that reported recordkeepers, Fidelity is the 800-pound gorilla. These numbers reflect not only that they are the most common choice of recordkeepers but that they are the primary choice of large plans.

2021 Top Advisory Firms

There is larger variance in advisory firms than in recordkeepers but you can see Fidelity (Strategic Advisors) is the second largest firm here as well.

Defined Benefit Plans

There was a lot of noise in the defined-benefit plan data but we wanted to include it here as it as a way to look at the transition from defined-benefit to defined-contribution plans.

Annual Defined Benefit Plans

Annual Defined Benefit Plans At Risk

Annual Multiemployer Defined Benefit Plans