401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2008
Source: Employee Benefit Research Institute

Because 401(k) balances can fluctuate with market returns from year to year, meaningful analysis of 401(k) plans must examine how participants’ accounts have performed over the long term. Looking at consistent participants in the EBRI/ICI 401(k) database over the five-year period from 2003 to 2008 (which included one of the worst bear markets for stocks since the Great Depression), the study found:

• After rising in 2003 and for the next four consecutive years, the average 401(k) retirement account fell 24.3 percent in 2008.
• The average 401(k) account balance moved up and down with stock market performance, but over the entire five-year time period increased at an average annual growth rate of 7.2 percent, attaining $86,513 at year-end 2008.
• The median (mid-point) 401(k) account balance increased at an average annual growth rate of 11.4 percent over the 2003–2008 period to $43,700 at year-end 2008.

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