48.5% of Professionals Have Changed Their 401(k) Plan Due To The Pandemic
Last week, we learned that 72% of professionals are concerned about their job security. At Blind, we wanted to see how that concern translated into their personal financial planning. This leads us to an important question: what are professionals going to do with their 401k?
We took to the platform and asked our users four questions:
- Have you made changes to your 401K plan since the start of the pandemic?
- What 401K contribution changes have you made since the start of the pandemic?
- What 401K portfolio changes have you made since the start of the pandemic?
- After the pandemic, do you foresee a change your 401K portfolio diversification spread to be:
Key Findings as of (4/20-4/22) (3,800 Responses):
- 48.5% of professionals have made changes to their 401K plan since the start of the pandemic
- 25.3% of professionals have started to contribute more/increase investment
- 11.3% contributed less/decreased investment
- 5.7% withdrew money/divested
- 21.6% of professionals have made their portfolios more aggressive growth strategy (i.e., more stock-heavy)
- Alternatively, 18.5% of professionals have made their portfolios More conservative (i.e., high-quality bond)
- Post Pandemic: 29.9% of professionals foresee changing their 401K portfolio diversification spread to be more aggressive growth strategy (i.e., more stock-heavy)
- Conversely, 10.9% of professionals foresee changing their 401K portfolio diversification spread to be more conservative (i.e., high-quality bond)
With employers already cutting back on hiring, promotions, and bonuses, we can see a trend where employers might also cut back on how much money they match for employees’ 401Ks. However, a 401k is a long term financial instrument, and according to experts, the market always comes back. In reality, the COVID19 Pandemic is a test of professionals’ risk aversion as investors.