Wednesday, January 7, 2015

A Good Year for 401(k)s

According to research just published by the Employee Benefit Research Institute, 2014 was a very good year for most of our 401(k) plans. Those nearing retirement got a big boost to their plans: Participants aged 55 to 65 who had been with their current employer for more than 20 years gained an increase in plan balances of more than 14 percent over the course of 2014.

Younger workers, who are starting from a lower base than older workers, saw the highest percentage increases in their 401(k)s. Workers aged 25 to 34 who had been with their current employers just one to four years saw their balances jump by an average of 47.9 percent.

You see that trend throughout the numbers, where newer workers make much more impressive percentage gains than older ones. Workers with between 10 and 19 years of service with their employers saw their balances rise on average by 16.7 percent, while those with 5 to 9 years of service did even better at 20.9 percent, and those with  just 1 to 4 years of service saw their balances gain 25.7 percent. With those trends in mind, 14 percent gains for older workers look pretty good.


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