What Does Consistent Participation in 401(k) Plans Generate? Changes in 401(k) Account Balances, 2007–2013

The annual EBRI/ICI 401(k) database update report is based on large cross sections of 401(k) plan participants. The cross sections cover participants with a wide range of participation experience in 401(k) plans; therefore, meaningful analysis of the potential for 401(k) participants to accumulate retirement assets must examine how a consistent group of participants ’ 401(k) accounts change over time. Two major insights emerge from looking at consistent participants in the EBRI/ICI 401(k) database over the six-year period from year-end 2007 to year-end 2013: o The average 401(k) account balance fell 25.8 percent in 2008, and then rose from 2009 through year-end 2013. Overall, the average account balance increased at a compound annual average growth rate of 10.9 percent from 2007 to 2013, to $148,399 at year-end 2013. o The median (midpoint) 401(k) account balance increased at a compound annual average growth rate of 15.8 per-cent over the period, to $75,359 at year-end 2013. Analysis of a consistent group of 401(k) participants highlights the impact of ongoing participation in 401(k) plans. At year-end 2013, the average account balance among consistent participants was more than twice the average account balance among all participants in the EBRI/ICI 401(k) database. The consistent group’s median balance was more than four times the median balance across all participants at year-end 2013