Age a Factor in Participation Rates

Spectrem Group research shows older individuals comprise an increasingly larger share of those who participate in defined-contribution plans.

In a survey of defined-contribution plans, Spectrem found that individuals who are 50 or older increased as a percentage of participants by more than two-thirds.

Meanwhile, the percentage of plan participants who are 35 or younger got progressively smaller. That youngest group shrank by nearly half, to 17% of participants.

This phenomenon reflects not only the aging of the Baby Boom generation but also the difficulty plan providers have had since the 2000-2002 bear market in convincing younger employees to participate in retirement plans.

Those individuals who have stopped contributing to plans tend to be younger than 35; divorced, widowed or separated, and have a household income of less than $50,000.

Spectrem also found that women represent a slight majority of those who participate in defined-contribution plans. In fact, two years ago was the first time that women (51%) have outnumbered men (49%) as participants. However, men are still more likely than women to have a household income of at least $100,000 (31% vs. 24%).

The latest survey once again shows the vast majority of plan participants are married (74%), with the balance split between those who single (14%) and those who are divorced, separated or widowed (12%).

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