Americans' stock allocation in 401(k) accounts hits historic high

Americans' retirement savings are increasingly tied to the fate of the stock market. Workers of almost all ages are investing record proportions of funds in stocks in their 401 accounts. After years of continuous stock market growth, they are either allocating more funds to stocks themselves or having asset managers do it for them. According to analysis by Vanguard Group of the millions of retirement accounts it manages, workers in their 30s invested 88% of their 401 accounts in stocks last year, up from 82% a decade ago. Investors in their 60s have a 60% allocation to stocks in their 401 accounts, higher than the 57% from ten years ago. Even in target date funds, more funds are being invested in stocks; these funds will shift funds from stocks to bonds as the retirement date approaches. According to Morningstar data, as of the end of 2024, workers who have just begun their careers have an average stock allocation of 92% in target date funds, higher than the 85% in 2014.