The average 401(k) account balance increased 36% as of Dec. 31 among participants who'd held accounts since at least 1999, and rose 15% in 2004 alone, according to a report issued today based on joint research conducted by the Employee Benefit Research Institute and the Investment Company Institute. Among those participants, the average account balance was $91,042 at the end of 2004, from $67,016 five years earlier, the report said. According to the report, 401(k) account balances "generally have increased since 1999 because of net contributions each year and stock market appreciation since 2002."
Investors' preferences "are shifting a bit to the simpler options" such as lifestyle and lifecycle funds, Sarah Holden, co-author of the report and senior economist at ICI, said during a conference call today. Lifestyle and lifecycle funds held $103 billion in assets at the end of 2004, up 49% for the year, according to a footnote to the report.
The research is based on information for roughly 40% of U.S. workers who participated in 401(k) plans as of Dec. 31.