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Tricks AND Treats for Average 401(k) Balances in October

October has long been known as the worst month for U.S. stock performance – but, with apologies to Charlie Brown, this year the average 401(k) balance got a rock for trick-or-treat.

The market hit older (55-64) workers with more seniority (20-29 years of tenure) harder – their average account balance slipped 1.1% after a 0.4% increase in September. 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.

Consequently, the average account balance for younger (25-34), less tenured (1-4 years) workers – where smaller balances mean that contribution flows generally have a larger effect – actually eked out a 0.4% gain in October, building on September’s 2.0% gain (and the 1.4% increase in August), according to the nonpartisan Employee Benefit Research Institute (EBRI).

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.

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