Those who doggedly contributed on a consistent basis to their 401(k) plans found their diligence over the past year rewarded with higher balances.
That's the word from the Employee Benefit Research Institute, which said that participants aged 55-65 who had been with their current employer for more than 20 years saw an increase in plan balances of more than 14 percent from year-end 2013.
Older workers weren't the only ones to see the benefit of regular contributions. Among younger workers aged 25-34 who had been with their current employers just one to four years, balances jumped by 47.9 percent.
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Naturally, all of that improvement wasn't due just to contributions; steady market returns during 2014 played an even more substantial role, at least among older participants with larger balances. Younger participants — those in their 20s — owed much of their success to their contribution efforts. Also factoring into overall account balances were loans and withdrawals, but on the whole the trend was definitely up.
What's interesting is that among older workers, the less time they'd been with their current employer, the higher the percentage of increase in their plan balances.
Workers with between 10 and 19 years of service with their employers saw their balances rise on average by 16.7 percent, while those with 5-9 years of service did even better at 20.9 percent and those with a relatively new employer — just 1–4 years of service — saw their average balances gain 25.7 percent.
Younger workers did even better. Those between the ages of 45-54 with 20-29 years of service at their current employer saw balances increase by 15 percent; with 10-19 years of service, 17.4 percent; with 5-9 years, 22.2 percent; and 1-4 years, 30.2 percent.
The figures were extracted from an EBRI-Investment Company Institute database on individual 401(k) participant accounts.
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