After a string of positive months for average 401(k) balances, the markets finally took their toll in March.
The average account balance of those aged 55-64 with more than two decades of tenure with their current employer slipped 0.7% last month, although the average account balance of those aged 25-34 with just one to four years of tenure crept up 0.6%, 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.
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. In fact, across the age spectrum, those with shorter tenures (and balances) eked out positive gains, apparently due to the weight of new contributions, while the average balances of those with five or more years of tenure lost ground.
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.
