Balances in our 401(k) retirement plans jump to record highs this fall

Five golden eggs

A rising stock market and more contributions from employees and employers drove the average balance in 401(k) plans to record highs this fall.

That's what Fidelity Investments found when it analyzed the 12 million 401(k) accounts that it manages.

These regular reports from the Boston-based mutual fund company are one of the best benchmarks for judging the growth of your 401(k) retirement plans.

From July through September — that's the third quarter — Fidelity says that the average 401(k) balance grew to $75,900, an increase of 4.2% from the end of the second quarter this year.

That's the highest balance Fidelity has seen since it started tracking this data more than 12 years ago.

Just one year before, the average balance was $64,300, or 18% lower.

A lot of that increase can be contributed to a lively stock market.

The S&P 500 rose nearly 6% during the third quarter, giving a hefty boost to 401(k) investment returns.

That gain helped investors recover from the 2.8% market decline in the previous quarter.

In addition, average annual employee contribution amounts grew to $5,900 at the end of September, which is up 7.3% from the third quarter of 2007 when the recession hit and the average was $5,500.

Employer contributions jumped up as well.

The average employer match hit $3,420 at the end of quarter three, which is a 19% increase from five years ago in the third quarter of 2007, when the average was $2,880.

“It’s encouraging to see companies making a greater contribution to their employees’ 401(k) plans, as we know a healthy employer match not only impacts employees’ retirement savings but also has a positive impact on their behavior, ultimately leading to better outcomes,” said James M. MacDonald, president of workplace investing at Fidelity Investments.

Did your balance grow by more or less than the average?

Or are you still wondering how to navigate the retirement plan at your workplace? Our 7 rules for a successful 401(k) will help you get started and make all of the right decisions.