The average 401(k) plan account balance for consistent participants grew at a compound annual average rate of 19.4% between 2016 and 2020, with the average account balance growing from about $78,000 to $158,361, more than 80% higher than the average account balance of $87,040 among participants in the entire database. The median 401(k) plan account balance among the consistent participants was $62,134 at year-end 2020, nearly three and a half times the median account balance of $17,961 for participants in the entire database.

Related: The biggest hurdle in getting younger workers to put money into a 401(k)

Employers can play an important role in building consistent participation, by providing a good job environment and solid benefits where employees want to stay, or by helping workers transition their accounts through job changes.

"The level of assets that can be generated by continual participation is substantial," said Craig Copeland, director, of Wealth Benefits Research, EBRI. "However, it also shows that many do not have this continuous participation, so plan sponsors and advisors need to help workers replicate this when changing jobs. Helping workers to preserve assets when possible (not cashing out); potentially consolidating accounts into the current plan; and facilitating contribution levels similar to what was established in the previous plan rather than starting an auto-enrollment default option, auto-escalation, or something similar again are all actions that plan sponsors can take to help workers get continuous participation results when changing jobs."

The study noted three primary factors that impact account balances, including participant and employer contributions, investment returns, and withdrawal and loan activity. Because younger participants' account balances tended to be smaller, their contributions produced a more significant percentage of growth in their account balances than older participants who tended to start the study period with larger average account balances, the study found.

Participants in their 20s with between 2 and 5 years of tenure had on average less than $10,000 saved, while at the other end of the spectrum, participants in their 60s with more than three decades of tenure had average account balances exceeding $400,000. Account balances increased with both age and tenure.

Investment returns, rather than annual contributions, generally account for most of the change in accounts held by older participants and those with larger balances.

The research also found 401(k) participants tend to concentrate their accounts in equity securities. On average at year-end 2020, more than two-thirds of consistent 401(k) participants' assets were invested in equity funds, the equity portion of target date funds, the equity portion of non-target date balanced funds or company stock. Younger participants generally tended to be more invested in equity funds and target date funds, while older participants were more likely to invest in fixed-income securities such as bond funds, money funds, guaranteed investment contracts (GICs) and other stable value funds. At year-end 2020, 401(k) plan participants in their 20s had allocated 86% of their plan account balances to equities while participants in their 60s had allocated 57% to equities.

Finally, loan or withdrawal activities can have an impact on 401(k) plan account balances. Although, in general, very few active 401(k) plan participants take withdrawals, participants in their 60s tend to have a higher propensity to make withdrawals as they approach retirement, the study found.

Kristen Beckman is a freelance writer based in Colorado. She previously was a writer and editor for ALM's Retirement Advisor magazine and LifeHealthPro online channel.