There’s going to be a lot to talk about when those second quarter 401(k) statements go out.
Year-to-date estimates based on the actual contribution records and investment choices of several million consistent participants in the EBRI/ICI database indicated that the average 401(k) account balance for younger (25-34), less tenured (1-4 years) workers surged 10.2%.
On the other hand, while the average 401(k) balances of older (age 55-64) workers with more than 20 years of tenure also gained ground, they’re up just 1.9% through June 30. Of course, this group’s average balance is generally more influenced by market moves than contributions, as is the case with the younger, less-tenured cohort.
Quarterly ‘Review’
Those patterns also held true for the second quarter. Older, more tenured workers saw their average 401(k) balance gain 2.6%, while the younger group’s balance was 7.0% higher. For the first quarter of 2018, younger (25-34), less tenured (1-4 years) workers closed 3.0% higher. On the other hand, the average balance of older (age 55-64), more tenured cohort (more than 20 years), ended that quarter 0.8% lower than it began the year.
As for June alone, the average 401(k) account balance for younger (25-34), less tenured (1-4 years) workers was 1.9% higher than in May, when it surged 4.6%. Older (age 55-64) workers with more than 20 years of tenure ended the month 0.6% higher, after gaining 0.9% in May.
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.
