Plan demographics impact 401(k) contributions, potentially boosting retirement savings for millions.
The study looked at how the makeup of retirement plans affects how much people contribute to their 401(k) accounts. They found that the salary and tenure of a plan can directly impact how much individuals contribute. Depending on the age of the person, their contribution rate can change by 1.6–3.0 percentage points. Also, the decision to contribute the maximum allowed amount is influenced by both plan demographics and individual characteristics.