Pre-retirees who continuously held a 401(k) plan with Fidelity Investments for the past 10 years more than doubled their account balances, the Boston fund company said.
The average account balance for these pre-retirees, aged 55 or older, rose to $211,300 by the end of the third quarter, from $96,000 10 years ago. Pre-retirees with a contribution rate at or above 8% this year showed average balances increasing more than 130% over the past 10 years, to $291,700.
"The past decade was certainly not a lost decade for participants who remained committed to saving even through all of the market's ups and downs," said James M. MacDonald, president of Fidelity's Workplace Investing group. "A disciplined, systematic savings approach in a diversified portfolio has been the key to building a sizable nest egg for many pre-retirees during one of the most volatile decades in history."
The same group of pre-retirees had a 10-year, average cumulative time-weighted personal rate of return of 18.3%, while the S&P 500 declined 4.2%.
In the third quarter, participants deferred on average 8.2% of earnings to their 401(k) plans. More participants increased their deferral rates (4.2%) than decreased (3.1%.) It was the sixth consecutive quarter of positive savings.
Average 401(k) account balances rose 9.4%, to $67,600, from the previous quarter.
Fidelity Investments released the data on Nov. 11.