February turned out to be a good month for the stock markets — and for 401(k) participants.
The average account balance of those aged 55-64 with more than two decades of tenure with their current employer was 1.4% higher for the month, while the average account balance of those aged 25-34 with just 1-4 years of tenure was up 3.6%, according to an analysis by the Employee Benefit Research Institute (EBRI) of the EBRI/ICI database.
Those gains, based on the actual contribution records and investment options of several million consistent participants in the EBRI/ICI database, were influenced by contributions and withdrawal/loan activity, as well as investments. The gains outpaced those in January as well as in December, when the average account balance among consistent participants aged 55-64 with more than 20 years of service with their current employer was up just 0.6%, while those in the age 25-34 bracket with 1-4 years of tenure rose 2.5%.
Older, higher tenured participants tend to have larger balances, and the movement in average balance tends to be more influenced by market moves than contribution flows. On the other hand, the percent change in average account balance of participants in their 20s is more heavily influenced by the relative size of their contributions to their account balances.
Drawing from that database, which 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.
