Tuesday, November 20, 2012

Strength in 401(k)s

How's your 401(k) doing these days? In a piece of very good news for Americans, Fidelity is reporting that the level of money in the nation's 401(k) plans is the highest it's ever been, or at least since the mutual fund firm began tracking that figure back in 2000. At the end of September, the average 401(k) had $75,900 in it.

There have been two fundamental factors driving this trend. First of all is the rise of the stock market: For the 12 months ended on September 30, the Standard & Poor's 500 was up by 27 percent.

At the same time, employees have ramped up their contributions to their 401(k)s. Five percent of all plan participants increased their contribution rate during the third quarter, while only three percent reduced them. Add it all up, and American 401(k)s start to look very healthy.

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