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Member, Beacon International Group, Ltd.
Employees’ 401(k) account balances in 2009 recovered investment losses suffered in 2008, but still were less than year-end 2007, according to a study released Wednesday.
The average 401(k) account balance was $64,200 last year, up 27.9% from $50,200 from year-end 2008. Still, the average 401(k) account was less than 2007 when the average was $69,200, the study by Boston-based mutual fund provider and 401(k) plan administrator Fidelity Investments found.
With the fall in the equities markets, participants have been shifting away from stocks. Fourteen percent of active participants held all of their 401(k) account balances in equities last year, down from 16% in 2008 and 20% in 2007.
As the economy slumped, more participants took out loans and made hardship withdrawals from their 401(k) plans. Ten percent of active participants took out a loan in 2009, up from 9% in 2008; while 2.1% took a hardship withdrawal in 2009, up from 1.8% in 2008, according to the study.
The study analyzed the account balances of nearly 11 million employees in 17,297 corporate plans serviced by Fidelity.
A summary is available online at http://personal.fidelity.com.