What’s Up With Consistent 401(k) Balances in November?

While the markets were volatile before and after the November elections, consistent 401(k) participants saw solid growth in their portfolios last month.

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 – rose 4.0%, twice the gain registered in September, and well ahead of October’s 0.4% gain, according to the nonpartisan Employee Benefit Research Institute (EBRI).

While older (55-64) workers with more seniority (20-29 years of tenure) also gained ground, their rise was less spectacular: a 1.4% rise for the average account balance that basically wiped out their October loss (a 1.1% decline). 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.

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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