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Regulation and Compliance > State Regulation

Top 10 States With Fastest 401(k) Growth

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The average 401(k) balance in 2012 was nearly $76,000, up 11% over 2011, according to Judy Diamond Associates. While the national average was up, though, some states experienced much faster growth than others.

“Although balances were up across the board, the increases were not evenly distributed,” Eric Ryles, managing director of Judy Diamond, said in a statement. “There are very real differences in the best and worst states. …”

Judy Diamond compared average balances in 2011 and 2012, the most recent data available, in about 470,000 active plans in each state and Washington, D.C. While growth overall was up, it was generally below the rate of return of 15.38% for the S&P 500, even among the 10 states with the most growth. Ryles was unconcerned, though, noting that older participants’ more conservative portfolios lowered the overall average.

“Participants with the highest balances, usually those getting close to retirement, should be focused more on capital preservation rather than capital growth,” he said. “This means that they are in bond funds and stable value funds, which will inevitably underperform a benchmark like the S&P, but do so safely. The overall rate of return of the plan is limited as a result.”

Saint Louis Gateway Arch.

10. Missouri

Growth Rate: 12.68%

2011 Average: $68,071

2012 Average: $76,704

Wichita, Kansas.

9. Kansas

Growth Rate: 12.69%

2011 Average: $62,322

2012 Average: $70,233

Phoenix, Arizona Skyline.

8. Arizona

Growth Rate: 12.91%

2011 Average: $59,328

2012 Average: $66,987

Castle Hill Lighthouse in Newport, RI.

7. Rhode Island

Growth Rate: 13.30%

2011 Average: $79,331

2012 Average: $89,886

Valdez Harbor, Alaska.

6. Alask

Growth Rate: 13.45%

2011 Average: $68,528

2012 Average: $77,748

Downtown Boise, Idaho.

5. Idaho

Growth Rate: 13.74%

2011 Average: $62,006

2012 Average: $70,528

Baltimore Inner Harbor.

4. Maryland

Growth Rate: 14.50%

2011 Average: $66,646

2012 Average: $76,312

Tulsa, Oklahoma skyline.

3. Oklahoma

Growth Rate: 14.74%

2011 Average: $61,339

2012 Average: $70,381

Herschler and Capitol Building , Cheyenne , Wyoming.

2. Wyoming

Growth Rate: 16.19%

2011 Average: $63,516

2012 Average: $73,798

Fishing in a Montana river.

1. Montana

Growth Rate: 16.27%

2011 Average: $70,835

2012 Average: $82,358

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