Average 401(k) Balances Surged in March

They say that March comes in like a lion and goes out like a lamb — but when it comes to average 401(k) balances, the reverse appears to be true.

During the month of March, the nonpartisan Employee Benefit Research Institute (EBRI) estimates that the average account balance of younger, less tenured (age 25-34, with 1-4 years of tenure) workers spiked 6.9%.

The average balance of older workers, notably those with 20-29 years of tenure, aged 55-64, which tends to be more sensitive to market swings due to those workers’ larger account balances, rose an impressive 4.5% during the past month. The accounts of younger, less tenured workers are more likely to be influenced by contribution flows.

Those average 401(k) account balances have had a bumpy ride in 2016. In January, EBRI’s estimates indicated that the average account balance of younger, less tenured (age 25-34, with 1-4 years of tenure) workers shed 2.0%, while the average balance of older workers, notably those with 20-29 years of tenure, aged 55-64, slid 2.2%. February’s results were somewhat better, with the average balance of younger, less tenured workers rising 1.6% and the average balance of those older, longer tenured workers rising 0.4%.

EBRI’s estimates of the annual change in average account balances for 2015 revealed an increase of 22.6% among younger, less tenured (age 25-34, with 1-4 years of tenure) workers, although older workers — specifically those with 20-29 years of tenure, aged 55-64 — rose 2.4%.

The EBRI/ICI database includes demographic, contribution, asset allocation and loan and withdrawal activity information for millions of participants. 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.

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