I thought this was interesting. It was on cnnfn. Ed
<< 401(k)s stay afloat
EBRI/ICI study shows average 401(k) balance fell only 0.1% in 2000
August 13, 2001: 10:32 a.m. ET
NEW YORK (CNNfn) - The average 401(k) account balance fell only 0.1 percent in 2000, despite a much worse performance by U.S. stocks, according to a study published Monday by two benefit research firms, though older planholders fared much worse than younger participants.
The Employee Benefit Research Institute (EBRI), together with the Investment Company Institute (ICI), compiled data on 10.3 million participants in 32,674 plans in 1999 and tracked how those plans grew in 2000. They found that the average 401(k) account balance fell to $58,774 from $58,850 -- a drop of only 0.1 percent -- despite a 10-percent decline in the S&P 500 and a drop of nearly 40 percent in the Nasdaq.
But EBRI and ICI also found that individual account performance varied greatly with the age of participants. Planholders in their 20s saw average 401(k) growth of 26.9 percent, while participants in their 50s saw their average account balance fall 2.3 percent.
"These results illustrate why it's often risky to rely on 'average' numbers, which are too often the only thing that's reported," said EBRI CEO Dallas Salisbury. "The database shows that individuals' personal experience is often very different from the average."
The reason for the big performance gap between the ages, EBRI said, is that younger participants' plans are smaller, so contributions have a bigger impact on their account balances. >> |
