Fidelity: Average 401(k) balances reach new high of $84,300
Friday, November 15, 2013 10:16 AM
Fidelity Investments says that 2013 has been a good year so far for 401(k) investors, with average balances hitting another record high amid strong stock market gains and an increase in contributions, CNNMoney reported.
Average 401(k) balances reached $84,300 during the third quarter, which was up more than 11 percent from an average $75,900 last year, according to Fidelity's analysis of more than 12.6 million accounts. Fidelity is the largest 401(k) provider in the country.
Late-year investment gains contributed to the increase. Though stocks dipped at the end of September amid fears of the government shutdown, the Dow Jones industrial average still ended the month up by more than 10 percent from a year prior, CNNMoney reported. The Standard & Poor's 500 index had gained more than 15 percent.
Workers who have been consistently contributing to a 401(k) plan over the past 10 years saw their average balance climb by 19.6 percent to $223,100 during the 12 months ended in June, Fidelity said. 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 found that fewer participants are relying on "do-it-yourself" investing. The percentage of investors using managed accounts, which provide individualized investment advice, and target date funds, which choose investment allocations based on the account holder's age or "target" retirement date, are also increasing, Fidelity said.
A separate study by the Spectrem Group's Millionaire Corner found that half of 401(k) plan participants between 50 and 64 aren't using a financial adviser as they prepare for retirement, ThinkAdvisor reported. Among those who do, just 40 percent say they rely on their adviser's guidance for the majority of their financial needs. The report, "Advisor Usage Among DC Plan Participants," found a third of respondents were referred to their adviser by a friend or family member.
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