Vanguard says more than half, 55%, of its 401(k) participants hold a target-date fund, and TDFs accounted for one-third of total plan contributions in 2013.
Furthermore, 40% of Vanguard participants were invested in a professionally managed account option. Of this group, over 30% are invested in a single target-date fund, and this figure is expected to jump to 48% in 2018, the fund family's research found.
In addition, TDFs in defined contribution (DC) plans continued to grow. At the end of 2013, 86% of plans offered a TDF, with 55% of all participants having a position in the funds.
"Because of the growing use of target-date options, we anticipate that nearly six in 10 participants and 80% of new plan entrants will be invested in a professionally managed option by 2018," said Jean Young, a senior research analyst with the Vanguard Center for Retirement Research, in the March 10 report.
