What Did August Bring for Average 401(k) Balances?

Temperatures may have been soaring in August, but average 401(k) balances? Not so much.

The average account balance for younger (25-34), less tenured (1-4 years) workers gained 1.4% in August, but that was well short of the 4.3% increase noted for July by the nonpartisan Employee Benefit Research Institute (EBRI).

As for older (55-64) workers with more seniority (20-29 years of tenure), their average account balance was basically flat in July, rising a mere 0.1% after climbing 2.6% in July.

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

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.

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.

September is, of course, traditionally a very poor month for U.S. stock performance – what will it be for average 401(k) balances?

You can access reports of both cumulative and monthly average account changes at http://www.ebri.org/?fa=401kbalances.

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