Fidelity Investments recently released 401(k) highlights from the fourth quarter of 2009 as well as for the full year that showed significantly higher balances with many participants recouping much of their losses from 2008.
It also released analysis on participants who have held a Fidelity 401(k) plan for the past 10 years that showed the power of consistent employee savings coupled with employer contributions and dollar cost averaging.
Average 401(k) account balances ended the year at $64,200, up another 5.7 percent from the end of the third quarter and up 28 percent for the year.
The median one-year personal rate of return (PRR) in 2009 was nearly 27 percent. PRR is a measure of investment performance during a given period of time. During the same time period, the S&P 500 had a total return of 26 percent.
The average deferral rate remained relatively flat for the year at about 8.2 percent, but the fourth quarter saw the continuation of a positive trend of more participants electing to increase their deferral rates than decrease them.
“The good news is that many workers, in spite of the economy, chose to save in their 401(k)s throughout 2009, and as the markets recovered, so did many Americans’ account balances,” said Jim MacDonald, president of Workplace Investing at Fidelity Investments, in a statement.