The average 401(k account balance showed a significant increase at the end of 2010, according to a new study released by Fidelity Investments. On average, accounts held $71,500 during the year, which was the highest average account balance revealed by Fidelity in 10 years.
Accounts Up 11 Percent from 2009
Fidelity Investments had a lot of positive numbers to share regarding the increases in 401(k) accounts. One great bit of data was that, for the 17,000 employer-sponsored defined contribution plans and their 11 million participants, the average balance of their retirement accounts rose 11 percent over the average balance in the fourth quarter of 2009.
Even better was the fact that after 401(k) accounts took a huge hit from the financial crisis, some even losing more than half of their balance in 2008 and 2009, they managed to increase 7.65 percent over the accounts in 2000 that averaged $54,700.
According to the study, about two-thirds of the increases seen were driven by market performance while one-third increased thanks to participant actions such as contributions. The Standard & Poor’s 500 Index increased by about 13 percent last year, and according to the study, workers deferred an average of 8.2 percent of their salaries.
Continuously-Active Accounts Tripled Over the Decade
The report also found that savers who were continuously-active, meaning they were employed by the plan sponsor and had a balance for the entire decade, saw their plans triple during that time. The average 401(k) balance increased from $59,100 in December 2000 to $183,100 in December 2010.
One reason account averages increased was because most participants continued to contribute to their plans through the financial crisis and fought against withdrawing funds or borrowing from their plans.
In fact, four out of five savers didn’t take a loan from their plans last year and only 33 percent cash out when leaving a job. Most people found that keeping money in their plans was the best way to ensure they would have money available once they retire.
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[...] Fidelity Study Finds 401(k) Account Averages in 2010 Reached 10-Year HighGo Banking RatesThe average 401(k account balance showed a significant increase at the end of 2010, according to a new study released by Fidelity Investments. On average, accounts held $71500 during the year, which was the highest average account balance revealed by …401(k) Contributions Hit 10-Year HighFinancial AdvisoryFidelity-administered 401(k) balances at 10-year highPensions & Investments401(k) savings hit record highCNNMoneyBloomberg -The Associated Press -Reutersall 154 news articles » [...]