The average account balance among American workers who consistently held 401(k) accounts from 1999 through 2006 increased at an annual rate of 8.7 percent, according to a study released by the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI).
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The average account balances rose to $121,202 at year-end 2006 from $67,760 at year-end 1999 among participants who maintained accounts for the entire period. Among the same group, the median account balance increased to $66,650 at year-end 2006 from $24,898 at year-end 1999.
"The average 401(k) participant had a good year in 2006 because the majority of 401(k) assets are invested in equities and the stock market did very well last year," says study co-author Jack VanDerhei, Temple University and EBRI Fellow. "But year-to-year comparisons can vary sharply, which is why it's far more meaningful to look at how participants' accounts have performed over time."
The study looked at participants who held a 401(k) account at the same employer at least from year-end 1999 through year-end 2006.