Fidelity 401(k) Balances Hit Record High

“The basic savings principles we encourage workers to adopt, such as saving consistently and holding a balanced portfolio with an appropriate exposure to equities—even when close to retirement—were key factors in driving better outcomes since 2009,” James MacDonald, president of workplace investing at Fidelity, said in a statement. “It’s important to continually remind employees that sticking to this savings philosophy may not always reward in the short-term but may over the long term.”

Unlike pre-retirees that stayed the course, the small percentage of pre-retirees (1.6%) who abandoned equities in reaction to market volatility in either late 2008 or early 2009 and never rebalanced experienced much more modest growth. Their balance grew 25.9% over the same time period with balances reaching $101,000 by the end of the first quarter from $80,200 at the end of the first quarter 2009.

“There is a valuable lesson to be learned from the minority of pre-retirees who abandoned equities altogether and experienced significantly less progress,” MacDonald added. “It underscores the combined importance of a proper asset allocation and savings behavior as they planned for retirement within all that life entails.”

The company says it’s significant to note that nearly two-thirds (65%) of the overall average balance increase over the past year was due to gains in equities–which it says underscores the important role they play in saving for retirement. Just as important were continued contributions made by both the employee and employer which accounted for one-third of the increase in account balance.

Fidelity Investments claims assets under administration of $4.2 trillion, including managed assets of $1.8 trillion, as of April 30.