Key facts
- Many long-term 401(k) contributors may have their money in cash.
- Default investment options can lead to cash holdings.
- Lack of active portfolio management by participants contributes to this situation.
This situation highlights a common pitfall in retirement savings where inertia or reliance on default settings can lead to suboptimal investment performance. Many employees may not be aware that their retirement funds are not being actively invested, potentially missing out on growth opportunities over time.
