Younger Workers’ 401(k) Balances Got a Big Bump in May
In spite of continued volatility, April’s “showers” produced some May flowers for average 401(k) balances.
In May, estimates based on the actual contribution records and investment choices of several million consistent participants in the EBRI/ICI database indicated that the average 401(k) account balance for younger (25-34), less tenured (1-4 years) workers surged 4.6%, building on the 0.4% increase the month before.
Older (age 55-64) workers with more than 20 years of tenure also gained ground. While this group’s average balance is generally more influenced by market moves than contributions, it gained 0.9% last month.
That all bodes well for those Q2 statements, after a mixed Q1. For the first quarter of 2018, younger (25-34), less tenured (1-4 years) workers closed 3.0% higher. On the other hand, the average balances of the older (age 55-64), more tenured cohort (more than 20 years), ended that quarter 0.8% lower than it began it.
The EBRI/ICI database includes demographic, contribution, asset allocation and loan and withdrawal activity information for millions of participants. EBRI has produced estimates of the cumulative changes in average account balances — both as a result of contributions and investment returns — for several combinations of participant age and tenure. You can find those results here