Posted by: Lauren Young on October 8, 2009
Several readers asked how is it possible that the typical U.S. worker had an average balance of $86,513 in their 401(k) account at the end of 2008, based on data this week published by the Employee Benefits Research Institute and the Investment Company Institute.
So let’s dig a bit deeper: I included in my post a link to the EBRI/ICI report. You’ll see that this research covers people who consistently held a 401(k) from 2003 to 2008 (Page 8 in the report).
And while the AVERAGE balance for those folks exceeded $80,000, their MEDIAN 401(k) account balance was $43,700 at yearend 2008.
But here is the number might make the most sense to readers: The median account balance for ALL 401(k) participants (based on a sample of six million plan participants in the database of 24 million) was a mere $12,655.
Do you think $12,655 is a more realistic account balance for the typical worker?
Why or why not?