What Will Q3 Participant Statements Show?

September has long been known as the worst month for U.S. stock performance (despite several well-chronicled October declines). How did average 401(k) balances fare this year?

Well, as it turns out, the average account balance for younger (25-34), less tenured (1-4 years) workers actually rose 2.0% in September, adding to the 1.4% increase in August, according to 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 up, albeit just 0.4%, though that was better than the 0.1% increase the month before. All in all, particularly with July’s surge, consistent 401(k) participants should find those third quarter statements to be a nice surprise.

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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