U.S. employees’ savings rates into 401(k) plans was 7.8 percent for the first 10 months of the year, down from 8 percent in 2007, despite the average account balance dropping 14 percent to $68,000, according to a new Hewitt Associates study.
Participants lost 18 percent of their account value in September and October alone.
Overall withdrawals from 401(k) plans were 6.2 percent for the first 10 months of the year, up from 5.4 percent in 2007. The increase came from hardship withdrawals—up 16 percent in the first 10 months of the year. Four percent of employees terminated their 401(k) contribution.
Loan usage was 22 percent for the first 10 months of the year, unchanged from 2007.
The study was based on data collected from 2.7 million 401(k) participants, said Hewitt spokeswoman Catherine Brandt.