September 8, 2023

National 401k Day

National 401k Day
By: Liz Strait, PhD


National 401(k) Day is observed annually on the Friday after Labor Day (that’s today!). It was started in the mid-1990s by the PSCA. The goal of its observance is to encourage workers to save and invest wisely for their retirement and to raise awareness about the significance of employer-sponsored retirement plans in achieving long-term financial security.


In celebration of National 401(k) Day and in pursuance of its goals, we are sharing some of our favorite facts about 401(k)s and some interesting behavioral finance findings focused on 401(k) plans.


401(k) Facts

  • Over $92 billion (1.4%) is lost from 401(k)s each year due to leakage (cashing out some or all the account).1


  • The median balance for 401(k) plans is approximately $27,000.2 But this is vastly different depending on account holder age:


Source: Nerdwallet (2023)


  • The median employer contribution (match) is 4%.2


  • Baby boomers, men, White (non-Hispanic), and Asian individuals are most likely to own any kind of retirement account.3


  • As of Q2 2023, 17.1% of 401(k) participants have an outstanding loan balance (for a loan they took out against their 401(k)).4


  • Fifty-six percent of the American workforce does not have access to a 401(k) plan.5


  • Thirty-five percent of all plan assets are in U.S. Equity funds.2


  • Participation rates increase when an employer matches contributions (vs. doesn’t match), but the rate the employer matches at does not affect overall participation.6

  • Women are more likely than men to enroll in 401(k) plans that don’t have automatic enrollment.7

                > This difference is largest for men and women earning $50,000 - $74,999. In this income bracket 81% of women participate while only 67% of men do.


  • Men have significantly higher average 401(k) balances than women ($93,512 vs. $70,037).2 This is due to higher income deferral rates and the wage gap between men and women.

                > Men save 7.5% of their income vs. 7% for women.2

                > For every $1 a man earns working full-time, women only earn 83.4 cents.8

Source: Bank of America.

Behavioral Finance Insights

Choice Overload

  • More plan options reduce plan participation--increasing the number of available plans by 10, reduces participation by 2% on average.9


Status Quo Bias

  • One company changed their enrollment default from opt-out (automatic enrollment) to opt-in (voluntary enrollment) and participation increased from 49% to 86%. (Currently only 29.3% of 401(k) plans offer automatic enrollment2).

  • Most employees have the same asset allocation in their 401(k) as the day they started work.


  • Some married employees still list their mother as their plan’s beneficiary.


  • Thirty-five percent of plan participants will say they intend to make a change in the next 90 days, but 86% of those people will do nothing.


Myopic Loss Aversion (greater sensitivity to losses + checking investment outcomes too frequently)

  • People will switch to lower-return investments because equities have more short-term fluctuations.


  • The solution: plan participants should check their 401(k)-account balance less frequently (preferably once a year).



  • Modern portfolio theory would suggest that investors hold something like a global index for optimal diversification. Yet, investors across the globe are over-invested in domestic stocks. On average, US investors are 93% invested in domestic stocks; UK investors are 82% invested in domestic stocks; and Japanese investors are 98% invested in stocks.


Home Team Bias

  • Over 30% of defined-contribution assets in large US companies are invested in employer stock.


  • Top company stockholders sacrifice up to 42% of their wealth compared to if they invested in a more diversified portfolio.

Atlas Point

Understanding behavioral finance and being able to easily apply its findings and insights can be invaluable when it comes to client engagement and conversations. Atlas Point can provide you with BeFi insights and help you easily apply them when they are most impactful. Our Financial Virtues™ survey takes 5-minutes or less to complete and allows you to assess clients for several biases, including some of the ones mentioned above (loss aversion, familiarity, and status quo bias). To try our Financial Virtues™ survey, click here: Financial Virtues Survey

Data Sources

[1] Morningstar, 2020.

[2] Vanguard, 2023.

[3] 2020 U.S. Census Data.

[4] Fidelity Investments, 2022.

[5] Economic Innovation Group.

[6] Bassett et al., Federal Reserve Board.

[7] CNBC.

[8] Bureau of Labor Statistics (BLS).

[9] Iyengar & Wei, 2004; Iyengar & Kamenica, 2006.