CHARLOTTE, North CarolinaN.C. – Bank of America today launched the four oh one K401(k) Participant Pulse, a new quarterly report series providing timely insights into plan participants’ confidence and sentiment toward retirement planning and overall financial wellness.

Drawing on data from the company’s proprietary financial benefits programs, which include more than 3 million four oh one K401(k) plan participants, the new report analyzes activity across four oh one K401(k) loans, hardship distributions and overall contribution rates, and aims to help gauge the extent to which short-term economic trends may be impacting consumers’ long-term financial planning.

“We are deeply committed to understanding how current financial realities are affecting consumers’ long-term financial health and planning,” said Lorna Sabbia, Head of Retirement and Personal Wealth Solutions at Bank of America. “Long-term retirement planning is a critical metric when considering an individuals’ financial wellbeing, as well as the economy as a whole.”

The inaugural four oh one K401(k) Participant Pulse reveals:

• Contribution rates down slightly in 2022. The average plan participant contribution rate dropped slightly from six point six percent6.6% at the end of 2021 to six point four percent6.4% at the end of 2022, suggesting consumers may have been a bit more focused on short-term financial needs last year.
• Fewer participants taking loans, but defaults rise slightly. In fourth quarterQ4 2022, 60,789 participants borrowed from their workplace plan, which was a decline of twelve percent12% from third quarterQ3. Loan defaults rose slightly to fifteen point nine percent15.9%. The average loan amount in fourth quarterQ4 was seven thousand five hundred dollars$7,500, the lowest average for all four quarters in 2022.
• Fewer participants taking hardship withdrawals for immediate financial needs. Participants taking a hardship distribution declined in fourth quarterQ4 2022, with the average at zero point four percent0.4% (down from zero point five percent0.5% in third quarterQ3) and the number of participants totaling 12,350 (down eighteen percent18% compared to third quarterQ3). In addition, the average hardship amount also declined in fourth quarterQ4 from third quarterQ3 by eight percent8%.
• Millennials lead the way in savings rates. Almost half of Millennials (forty seven percent47%) contributed seven percent7% or more to their plan – more than any other generation. Meanwhile, Baby Boomers had the highest percentage of participants (forty three percent43%) contributing three percent3% or less.
• 30- and 40-year-olds drive borrowing. More than half of loans taken in 2022 were participants ages thirty to forty nine30-49. Gen X (age forty three to fifty eight43-58) had more participants (three point one percent3.1%) with loans in default at year end than any other generation.

Bank of America’s Retirement & Personal Wealth Solutions organization serves more than 25,000 companies of all sizes and more than six million employees as of December 31, 2022^[1]. Bank of America offers institutional client employees a range of financial benefit programs and solutions to help them pursue their financial future.

Financial wellness at Bank of America

At Bank of America, we know that supporting the physical, financial and emotional wellbeing of our employees in their personal life also supports them in their work life — so they can be the best at work and at home. When it comes to financial wellness, we believe that the more informed people are about their money, the clearer their financial outlook can be. This applies not just to our clients, but to our employees, as well. This is why we offer robust financial offerings to our employees that focus on driving better behaviors across life priorities and the financial spectrum — budgeting, planning, saving, investing and more. Our competitive financial benefits – including four oh one K401(k) plans that include a company match, retirement advice ^[2], health savings accounts ^[3], banking ^[4] and investing ^[5] programs, educational resources and financial wellness tools – help employees address money issues in the here-and-now, prepare for retirement and help protect their family over the long term.

Bank of America

Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 68 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 15,000 A T MsATMs (automated teller machines) and award-winning digital banking with approximately 56 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (N Y S E B A CNYSE: BAC).

Retirement and Personal Wealth Solutions is the institutional retirement business of Bank of America Corporation (“B of ABofA Corp.”) operating under the name “Bank of America.” Investment advisory and brokerage services are provided by wholly owned non-bank affiliates of B of ABofA Corp., including Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as “M L P F and SMLPF&S” or “Merrill”), a dually registered broker-dealer and investment adviser and Member S I P CSIPC. Banking activities may be performed by wholly owned banking affiliates of B of ABofA Corp., including Bank of America, N AN.A., Member F D I CFDIC.

Reporters may contact

Don Vecchiarello, Bank of America
Phone: one nine eight zero three eight seven four eight nine nine1.980.387.4899
don.vecchiarello@bofa.com

MAP #5446046

Footnotes

^[1] Source: Global Wealth and Investment Management Finance.

^[2] Investment advice on four oh one K401(k) assets is only provided to plan participants through certain investment advisory programs as directed by plan sponsors.

^[3] Made available through Bank of America, N AN.A.

^[4] Bank products are available from Bank of America, N AN.A., and affiliated banks.

^[5] Investment products are available from Merrill Lynch, Pierce, Fenner & Smith Incorporated.