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:

1. Have you made changes to your 401K plan since the start of the pandemic?
2. What 401K contribution changes have you made since the start of the pandemic?
3. What 401K portfolio changes have you made since the start of the pandemic?
4. 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.