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How Did the Average 401(k) Fare in 2019?

Industry Trends and Research

A year ago, the average 401(k) balance went into 2019 with a bit of a hangover. This year the hangover could be for a different reason. 

It’s easy to forget that in December 2018, the markets were so rough that the average 401(k) account balance for younger (25-34), less tenured (1-4 years) workers shed 4.9% for the month – which means the losses were large enough to overwhelm the positive impact of contributions. Indeed, a steep sell-off in December 2018 left the S&P 500 just 0.2% from officially hitting a bear market (defined as a 20% drop off its peak), ending 2018 with a loss of more than 6%, closing at 2,485.74 on Dec. 31, 2018. Tuesday it closed at 3,230.78.

December Data

But that, as they say, was then. According to estimates from the nonpartisan Employee Benefit Research Institute (EBRI), December 2019 saw the average 401(k) account balance for younger (25-34), less tenured (1-4 years) workers surge 3.3%. For older (age 55-64) workers with more than 20 years of tenure, whose average balance is generally more influenced by market moves than contributions, the average 401(k) balance rose 2.0%.

Those Q4 statements should bear good tidings as well; the youngest, least tenured cohort rose 10.4% (remember that those balances, based on the actual contribution records and investment choices of several million consistent participants in the EBRI/ICI database, are often strongly influenced by contribution flows). The older, more tenured cohort’s average 401(k) balance climbed 5.8%.


Oh, and as for 2019 as a whole – well, in a year that the S&P 500 rose more than 28%, and the Dow gained 22% (the NASDAQ was up an even better 35%), the average 401(k) balance – buttressed not only by the markets, but by contributions – ended the year 44.9% higher for those workers aged 25-34 with less than 4 years of tenure, while workers with more than 20 years of tenure, aged 55-64, registered a 24.6% increase.

EBRI’s analysis, based on the organization’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.