Account Balances Continue to Strengthen

The latest quarterly statistics released by Fidelity show that 401(k) account balances continue to improve. The average now stands at a record-high $84,300 as of September 30, 2013. This represents an 11% increase from the same time frame in 2012. About three-quarters of the growth was due to stock market gains, with the remainder due to employee and employer contributions. Fidelity examined the data from the nearly 21,000 plans it services,comprised of 12.6 million participants. 

A few weeks ago, the importance of looking at a continuous group of participants was discussed in this space. The reason for this is that new hires and frequent job changers can skew the averages. Fidelity now echoes that earlier EBRI data. According to Fidelity, participants who have been continuously active in their 401(k) plan for 10 years saw an increase of 19.6% since 9-30-12, with their average balance now at $223,100. Going a step further, pre-retirees age 55+ who have been in their plan for at least ten years have an average balance of $269,500. One other item of note is that one in three participants now use professionally managed investment options, compared with a decade ago when virtually everyone went the do-it-yourself route.