The lingering problems with the economy continued to force defined contribution participants to borrow against their retirement savings as late as last year even as an improving stock market caused assets to rise, a report by the Investment Company Institute found.
At the end of the third quarter, recordkeepers reported that 18.3 percent of participants had outstanding loans. Before the Great Recession began in 2008, the rate had been 15.3 percent and had mostly been at 16 percent or below back to 2000.
U.S. retirement assets at the end of the first three quarters of 2013 rose $900 billion over a year earlier to $21.9 trillion dollars. A quarter of the assets were in defined contribution plans. IRAs and public pension plans accounted for about half of all assets, with annuities and private defined benefit plans accounting for the rest.
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Bolstering participants' faith in their retirement plans – just 2.5 percent stopped contributions during the period – is a report earlier this month by Vanguard that showed 401(k) balances last year rose 18 percent to a record average of more than $100,000.
With the rebounding markets, participants were evidently comfortable with their asset allocations. Only a small portion of plan participants changed the division of their assets (9.2 percent) or their contributions (6.5 percent) during the period studied. Those rates were similar to those seen since 2010.
That contrasts with the same period in 2008 when a falling stock market spurred 13.5 percent to change their allocations.
Three percent took withdrawals during the three quarters, with about half for hardship reasons.
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