Employees’ 401(k) account balances in 2009 recovered some investment losses suffered in 2008 but still were less than they were at the end of 2007, according to a study released Wednesday, February 17.
The average 401(k) account balance was $64,200 last year, up 27.9 percent from $50,200 at then end of 2008. Still, the average 401(k) account was less than at year-end 2007, when the average was $69,200, the study by Boston-based mutual fund provider and 401(k) plan administrator Fidelity Investments found.
With the fall in the equities markets, participants have been shifting away from stocks. Fourteen percent of active participants held all of their 401(k) account balances in equities last year, down from 16 percent in 2008 and 20 percent in 2007.
As the economy slumped, more participants took out loans and made hardship withdrawals from their 401(k) plans. Ten percent of active participants took out a loan in 2009, up from 9 percent in 2008; while 2.1 percent took a hardship withdrawal in 2009, up from 1.8 percent in 2008, according to the study.
The study analyzed the account balances of nearly 11 million employees in 17,297 corporate plans serviced by Fidelity.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.