Punxatawny Phil’s prediction of an early spring may have been off the mark, but February was another good month for 401(k) balances.
While the second month of 2019 wasn’t exactly a “Groundhog Day” repeat of January, according to estimates from the nonpartisan Employee Benefit Research Institute (EBRI) — the average 401(k) account balance for younger (25-34), less-tenured (1-4 years) workers was still 3.8% higher at month-end. And if that was off the 7.5% growth surge in January, it was much better than the 4.9% decline in December.
As for older (age 55-64) workers with more than 20 years of tenure, that average balance grew 2.1%. Generally more influenced by market moves than contributions, that group’s average 401(k) balance climbed 5.4% in January, reversing the 4.7% decline in December. Remember that the EBRI estimates are based on the actual contribution records and investment choices of several million consistent participants in the EBRI/ICI database.
That analysis, based on EBRI’s huge database of some 26 million 401(k) plan participants in more than 101,000 employer-sponsored 401(k) plans representing nearly $2 trillion in assets, is unique because 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.