Value of 401(k) retirement plans vaults to new high

Due to a lively stock market and savvy investing, the average balance in our 401(k) retirement plans hit another record high at the end of the third quarter — July through September 2013.

The average 401(k) balance jumped from $80,600 in the second quarter to $84,300 in the third quarter, according to Fidelity Investments, a Boston-based mutual fund company whose quarterly reports are one of the best benchmarks for judging the progress of your 401(k) retirement plans.

Over the last year, our balances have increased by 11.1%.

Nearly three-quarters of that growth (72%) can be attributed to market gains, Fidelity says.

The rest of our gains (28%) were due to employee and employer contributions.

It's worth noting that employees who were continuously active and making contributions to their 401(k) plan over last 10 years saw a 19.6% rise in their balance, hitting an average of $223,100 during the past 12 months.

That's a great case for starting to invest at an early age, making consistent contributions to our 401(k) plans and contributing the maximum annually, if possible.

But in addition to upping our contributions, having a managed account can certainly help our retirement success.


"Professionally managed investment options can help working Americans achieve better retirement outcomes by creating a diversified portfolio, which is often the most challenging aspect of participating in a workplace retirement plan,” James MacDonald, president of Workplace Investing at Fidelity, said in a press release.

Most 401(k) participants were "do-it-yourself" investors a decade ago, notes Fidelity.

But now, because of the increased availability of managed accounts and target date funds, which pick investment allocation based on a saver's age, around a third of employees now have professionally managed accounts.

“A managed account acknowledges that some participants prefer a more personalized approach with their investment strategy based on their specific needs, including their emotional tolerance for risk or assets outside their 401(k),” MacDonald said.

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