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Average 401(k) Balance Continues to Build

Industry Trends and Research

The markets may have ended the month on a downbeat, but the average 401(k) balance continued to heat up in July.

According to estimates from the nonpartisan Employee Benefit Research Institute (EBRI), the average 401(k) balance for those aged 25-34 with 1-4 years of tenure has gained rose another 2.5% in July, building on the 24.3% year-to-date gain registered at the end of Q2. 

The average 401(k) balance for older, more tenured workers (those with more than 20 years of tenure, aged 55-46) – balances that are more likely to reflect the impact of the markets than contribution flows – gained 1.2%. A month ago, those balances had been up 14.5% year-to-date.

EBRI’s huge database of some 27.1 million 401(k) plan participants in nearly 111,000 employer-sponsored 401(k) plans representing some $2 trillion in assets is unique in that it includes data provided by a wide variety of plan recordkeepers and, therefore, portrays the activity of participants in 401(k) plans of varying sizes – from very large corporations to small businesses – with a variety of investment options. 

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 find those results here.