Podcast Center
Video Center
Webcasts
Resource Center
Events
February 23, 2011 at 11:34 AM
Fidelity Investments reported Wednesday that at the end of 2010 the average 401(k) balance reached a 10-year high, rising $71,500.
According to the company, participants who have actively contributed to their accounts for the past 10 years have seen their balance increase from $59,100 at the end of the fourth quarter 2000 to $183,100. Average participant deferrals are over 8% for the eighth consecutive quarter, and while 3% decreased their deferral rate, over 6% increased it.
James MacDonald, president, Workplace Investing, Fidelity Investments, argued against misconceptions about 401(k)s as a successful savings tool.
“While 401(k)s have been in existence for more than 30 years and are now the most widely held workplace retirement account by today’s American workforce, many misconceptions exist about them,” he said in a statement. “Despite the myths out there, this savings vehicle is, in fact, helping millions of Americans of all income levels save for their futures. Employers are committed to offering a compelling program with a company match as well as lifetime investment guidance to help their employees reach their goals.”
Fidelity outlined five common myths about 401(k)s:
Myth 1: The majority of lower-income employees don’t participate in their 401(k) plan.
According to Fidelity, over half (53%) of participants in 401(k) plans kept by Fidelity earn between $20,000 and $40,000. Seventy-one percent of participants earning $40,000 and $60,000 participate.
