Monday, November 9, 2015

Tough Times for 401(k)s

The markets took a spill in the third quarter of this year, and that poor performance is now starting to show up in reports of retirement account balances. According to Fidelity Investment’s analysis, balances in both 401(k) and IRA savings fell in the quarter.

The average 401(k) balance fell to $84,400 at the end of the third quarter, from $91,100 in the previous quarter. The average total 401(k) contribution amount fell slightly, to $2,610 from $2,770 in the second quarter. IRA balances fell to $88,700 from $96,300 at the end of June.

But it's also easy to make too much of these short-term numbers. Despite all the turmoil in the markets and the slight drop in contributions, 401(k) balances still increased over the course of the year. A year ago, the average balance had been $89,100.

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