Friday, October 18, 2013

Watching 401(k) Balances

There's a new report out from the Investment Company Institute showing dramatic gains in 401(k) accounts in recent years. Between the start of the financial crisis in 2008 and 2011, the most recent year for which we have figures available, the average 401(k) balance nearly doubled.

At the end of 2008, shortly after the Lehman Brothers bankruptcy and just after the onset of the recession, the average 401(k) had $49,932 in it. By the end of 2011, that same figure had vaulted up to $94,482.

On the other hand, this study also shows how you can play with statistics. In 2007 - before the financial sector melted down and the recession hit - the average 401(k) balance was up at $76,534. Obviously, the Wall Street crash drove that down in a hurry. From 2007 to 2011, that balance increased by 23 percent - a healthy figure, but a long way from doubling.

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