How do you size a 401(k)?


April 30, 2012


In 2010 there were 362,757 401(k) plans with more than zero dollars in reported assets. All told, they added up to around $2.8 trillion.

But how do you slice up that market? And which end do you try to eat?

There are the outliers. More than 7,000 401(k)s held more than $30 million in assets. On the opposite end of the scale, the same number held less than $15,000. I don’t care how many participants you have, $15,000 is not a good amount to have saved for retirement.

But more likely you’re right in the middle: $698,971 is the median (i.e. 50th percentile) 401(k) asset value, with more than 132,000 plans falling within one standard deviation (ooh – statistics!).

It’s a good bet that you’re not farming plans at all ranges of the curve. As in all things, there are fewer of the best than there are of the rest: that’s what makes them the best.

There are only 719 “mega” 401(k)s: those with more than $500 million in assets. However, that handful accounts for more than half of every single dollar invested by a 401(k). Plans with under $1 million in assets account for 60 percent of all 401(k)s, but only 3 percent of the assets.

Micro, small, mid, large, mega… Sure you’re more likely to snag a minnow, but your family will eat better if you manage to take down a megashark.



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