Contributions Carry Average 401(k) Higher in April

Those April showers may have done some good in helping the average 401(k) balance grow last month.

According to an analysis by the nonpartisan Employee Benefit Research Institute (EBRI), the average balance of older workers, notably those with 20-29 years of tenure, aged 55-64, gained 0.6% during the month, on top of the 4.5% increase in March. At the same time, the average account balance of younger, less tenured (age 25-34, with 1-4 years of tenure) workers gained 1.9%, on top of March’s 6.9% rise.

The former category tends to be more sensitive to market swings due to those workers’ larger account balances. The accounts of younger, less tenured workers are more likely to be influenced by contribution flows.

The estimates, based on 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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