Markets Move Average 401(k) Balances (Even) Higher in November

November turned out to be a real month of thanksgiving for average 401(k) balances, which continued to build on a year of strong growth.

Among older workers – those aged 55-64 with more than 20 years of tenure (and consistent participation since 12/31/14)– the average 401(k) balance gained 2.0% during the month, on top of a 1.8% increase the month before,  according to an analysis by the nonpartisan Employee Benefit Research Institute.

Among younger (age 25-34), less tenured (1-4 years) workers, the average 401(k) account balance surged even more – increasing 3.3% on top of October’s 3.2% gain.

Those gains were on top of September’s increases of 1.3%, and 2.8%, respectively.

That analysis, based on EBRI’s huge database of some 24 million 401(k) plan participants in 64,619 employer-sponsored 401(k) plans representing $1.536 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.

Of course, younger workers have smaller balances, and that means that contribution flows, rather than market moves, generally have a larger effect on the rate of increase. On the other hand, older, higher tenured participants tend to have larger account balances, and the movement in average balance tends to be more influenced by market moves than contribution flows.

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.

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