The average 401(k) balance ended the first quarter like a lion, and there was nothing mild about the gains in the first month of the second quarter.
In April the nonpartisan Employee Benefit Research Institute (EBRI) found that the average account balance for younger (25-34), less tenured (1-4 years) workers rose another 2.5%, while those aged 55-64 with more than 20 years of tenure gained 1.2%.
For the first quarter, the average account balance for younger (25-34), less tenured (1-4 years) workers surged by 13.4% (that’s not a typo), while those aged 55-64 with more than 20 years of tenure gained 6.4%.
Of course, younger workers have smaller balances, which means that contribution flows, rather than market moves, generally have a larger effect on the rate of increase. On the other hand, older, higher tenured participants tend to have larger account balances, and the movement in average balance tends to be more influenced by market moves than contribution flows.
EBRI has produced estimates of the cumulative changes in average account balances – both as a result of contributions and investment returns – for several combinations of participant age and tenure. You can access reports of both cumulative and monthly average account changes here.
