Stay-the-course has been etched into savings habits since the last great meltdown ultimately churned higher account balances.
Reports after the 2008-09 financial crisis showed those who didn't abandon equities and didn't dial down contributions actually got rewarded when markets rebounded. This downturn remains a defining moment for participant consistency, showing simple inertia – while it might not be favorable in the end – can actually be practical in order to ride out a market storm.
Studies show this path paid off at the end of first quarter when, according to Fidelity, account balances hit an all-time high at an average $75,000. It paid off again at the end of the second quarter, when those participants who stuck with an allocation that included equities saw a 50 percent increase (compared to 2 percent for those who didn't want to take the risk).
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.