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How's your 401(k) doing-401(k)s hit records as workers sock away more, stocks jump

edited February 13 in Fund Discussions
https://www.yahoo.com/news/401-k-hit-records-workers-112754438.html

NEW YORK (AP) — How's your 401(k) doing?

President Donald Trump likes to ask that question around the country, sometimes throwing out big gains like 90% or 95%. The average 401(k) did indeed hit a record last year, although its growth was considerably less than that.

The average 401(k) balance rose 17% last year to $112,300 from the end of 2018, according to a review of 17.3 million accounts by Fidelity Investments. The average individual retirement account, or IRA, balance rose the same percentage to $115,400

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  • edited February 13
    “The average 401(k) balance rose 17% last year to $112,300 from the end of 2018, according to a review of 17.3 million accounts by Fidelity Investments. The average individual retirement account, or IRA, balance rose the same percentage to $115,400”.

    - Socking away more ? The balance increases reported don’t reflect that, since the S&P rose 31+% in 2019 (according to the article).

    - Are these numbers for only Fidelity’s clients? Or are they referencing data for the total of all U.S. retirement savers? If only Fidelity, numbers may not be representative.

    - Do the reported balances represent all retirement plans - or just those where the holder hasn’t yet retired? (Let’s hope it’s the former.)

    - I contended a while back (some other thread) that worker contributions tend to increase when markets are richly valued. Fidelity’s observations might support that.
  • hank said:

    “The average 401(k) balance rose 17% last year to $112,300 from the end of 2018, according to a review of 17.3 million accounts by Fidelity Investments. The average individual retirement account, or IRA, balance rose the same percentage to $115,400”.

    - Socking away more ? The balance increases reported don’t reflect that, since the S&P rose 31+% in 2019 (according to the article).

    - Are these numbers for only Fidelity’s clients? Or are they referencing data for the total of all U.S. retirement savers? If only Fidelity, numbers may not be representative.

    - Do the reported balances represent all retirement plans - or just those where the holder hasn’t yet retired? (Let’s hope it’s the former.)

    - I contended a while back (some other thread) that worker contributions tend to increase when markets are richly valued. Fidelity’s observations might support that.

    By whatever means it takes to increase a 401k value. Doesn't matter what the market valuations are. It is simply picking the correct investment for one's age and retirement horizon.

  • Hi @hank
    You noted: "- I contended a while back (some other thread) that worker contributions tend to increase when markets are richly valued. Fidelity’s observations might support that."

    Based upon my observations regarding 401k/403b plan participants over many years; the participants have a chosen amount of money placed each pay period into their plan, regardless of what the markets are doing.

    One may suspect there is a very small percentage (less than 5%) of these participants who actually pay attention to the markets. Those who do pay attention may alter some of their allocations periodically; but not likely the contribution amount, unless there is a change in their overall financial circumstance.

    My inflation adjusted 2 cents worth
    Catch
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