New data released by Fidelity Investments in the past few days shows that the average 401(k) account balance in the United States has hit a 10-year high, reaching $71,500. This represented an increase of $8,300, or 11.5%, from the $64,200 average 401(k) balance last year.
One of the things that I was glad to see was that 92% of companies kept their moral obligation to their employees to continue offering matching funds during the market crash so they could take advantage of falling stock prices. It turns out that despite the headlines touting companies slashing 401(k) matching funds during the recession, only 8% of firms cut benefits. Fidelity said that more than half of those firms have already reinstated what they took away during the crisis.
According to Fidelity's research, 51,000,000 American workers contributed to a 401(k) plan and saved an average of 8.2% of their salaries. In the most recent quarter, 6.1% of retirement savers increased the amount they were contributing to their 401(k) account, while only 3% decreased the amount of money they were putting aside, resulting in an overall average rise.
The Average 401(k) Worker Is Just Fine
This goes to show you that the average guy, who does what he is supposed to do, is fairly rational. But there is a significant minority of people in this country that panic whenever there is a stock market selloff, dump their 401(k) assets to cash in and lock in losses, pay early withdrawal fees, penalties, and taxes, and then protest that the stock market is "rigged" and that the rich are stealing from them.
