Retirement Plan Assets by Age

As several people pointed out, there was a flaw to the information source in my last post. I went back and found plan balances by age range. The only problem is, these balances are as of the close of 2008. Most likely, these numbers would be significantly higher (or at least I hope they would be).

Source: 401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2008, page 55

It’s important to note that these are 401(k) plan balances and not savings and investments, which were used in the last post. Although these numbers are somewhat more optimistic than my last post, they still seem too low to me.

Regardless of which numbers you use or which report you look at, the bottom line is: we need to save more!

8 thoughts on “Retirement Plan Assets by Age”

  1. Thanks for the new chart, JLP. The numbers are still lower than they probably ought to be (and there’s always a bit of danger in looking at averages instead of medians). But one positive thing I see from that chart is that from 1999 to 2007, the average balances within each age range trended up – which seems to suggest that people ARE saving more!

  2. Courtney,

    The paper doesn’t break it down by age group but states that the median account balance at the end of 2008 was $12,655 (page 15). Now, 2009’s performance most likely brought that median value up significantly.

  3. It does look low — let’s hope that the people who are below the numbers in that chart are investing via some other vehicle: personal business, landlord/realestate, state or federal pension, etc.

    I’m double the number in that chart for my age/tenure and I still think I’m behind…

  4. The numbers are low. One reason is that when people switch jobs they take the money out of their 401k – pay the taxes and penalties – and spend whatever remains.

    I think the number of people that do not roll the money over to another 401K or into an IRA is over 50%.

    I think the law should be changed and people should never be allowed to spend 401K money until they retire. Yes I mean NEVER!

  5. The numbers are low, but they are meaningless because it’s exclusively 401K balances not 401Ks plus IRAs.

    @David M: it’s not clear from these numbers how many people who switch jobs rolled over to an IRA and how many didn’t. IRAs aren’t included in these numbers, right JLP?

  6. #5 kitty) excellent point — IRAs normally don’t get too big, which was why I didn’t think it was a big deal if they were excluded. But IRAs from 401k rollovers are a huge deal…

  7. It’s quite scary that the average balance drop from 2007 to 2008 is nearly the same across all ages and tenures: 24-29%. It implies nearly the same asset class distribution for 20-somethings and 60-somethings, and to me implies that few are paying attention to the risk they should be and are taking.

  8. I am glad to see you followed up on this survey because every survey has to be taken with a grain of salt.

    I am curious as to whether the number of participants in this survey is greater or less than or equal to the number of participants in real life.

    Case in point, my only active 401k plan has 1 grand in it. All others have been rolled over into my own account which is roughly 20 grand in it. If my 1 grand was counted here in the survey and not my 20 grand, then the results is flawed.

    Still, like you, I always enjoy reading reports like these to get a general picture of our finances.

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