Things Heat Up for 401(k) Balances in July

Bouncing back from a dip in June, average 401(k) balances were back up in July.

The average account balance of younger, less-tenured (age 25-34, 1-4 years of tenure) workers fared best, gaining 3.5% in July. The average balance of older workers, notably those with 20-29 years of tenure, aged 55-64, gained half that amount — 1.8%. Older, higher tenured participants tend to have larger account balances, and the movement in average balance tends to be more influenced by market moves, whereas the accounts of younger, less tenured workers is more likely to be influenced by contribution flows.

Those estimates were based on the actual contribution records and investment choices of several million consistent participants in the EBRI/ICI database.

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.

In June, older (55-64) workers with more seniority (20-29 years of tenure) lost ground — with the average balance slipping 1.5%, according to estimates from the nonpartisan Employee Benefit Research Institute (EBRI), while in May, the average balance of younger, less-tenured 401(k) savers was up 2.8%, and the average balance of the older group experienced a 1% increase. April also saw increases in the average account balances, albeit much smaller ones.

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