Average 401(k) balances reached a new high at the end of the third quarter, jumping 11.1 percent from a year ago.
According to Fidelity Investments, the average 401(k) balance rose to $84,300 in large part because of the resurgence in the stock market.
Employees who were continuously active in their 401(k) plan over the past decade saw their average balance rise nearly 20 percent to $223,100 during the past 12 months. For pre-retirees over the age of 55 who have been active in their plan for at least 10 years, the average balance is $269,500, Fidelity found.
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One in three plan participants are now utilizing managed account options and target-date funds in their workplace plans, which is a major change from 10 years ago when the bulk of plan participants were "do-it-yourself" investors.
The advent of managed accounts has dropped the number of do-it-yourselfers. At the end of the third quarter, 33.1 percent of 401(k) participants had 100 percent of their plan assets in a target-date fund, up from just 3 percent 10 years ago, Fidelity said. This is particularly true for younger investors. Fidelity found that 55 percent of Gen Y participants had all of their assets in a target-date fund.
Since the third quarter of 2009, Fidelity has seen a more than three-fold increase in the number of employers offering managed accounts to their employees, as well as the number of participants taking advantage of them. In addition, assets in retail managed accounts – such as those in IRAs or individual brokerage accounts – have more than doubled since then.
Fidelity Investments is one of the world's largest providers of financial services, with assets under administration of $4.4 trillion, including managed assets of $1.9 trillion, as of Sept. 30, 2013.
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