Riding a resurgent stock market, the average 401(k) balance rose to a new high of $84,300 at the end of the third quarter, up 11.1 percent from a year ago, according to a new report from Fidelity Investments.
Employees who were continuously active in their 401(k) plan over the last 10 years saw the average balance rise 19.6 percent to $223,100 during the past 12 months, the research shows. For pre-retirees age 55 or older who have been active in their plan for at least 10 years, the average balance is now $269,500.
Fidelity also finds that with the increased adoption and availability of target date funds and managed accounts in workplace retirement plans, one out of three employees now use a professionally managed investment option for their 401(k) assets. Ten years ago, nearly all plan participants were “do-it-yourself” investors, those who made their own investment decisions.
“Today’s 401(k) plan is profoundly different than it was a decade ago,” said James MacDonald, president of Workplace Investing at Fidelity. “Plan design has evolved greatly to reflect the fact that 401(k) plans are often the primary driver of retirement savings for most working Americans.”