While it slipped a bit at the end, July turned out to be another good month for the equity markets—and those average 401(k) balances?
Well, it turned out to be a good month for them as well, extending the gains that they’ve experienced in recent months. The S&P 500 notched its sixth consecutive month of gains, rising 2.3% in July, while the Dow gained another 1.3%, just ahead of the tech-heavy NASDAQ’s 1.2% rise.
As for the average 401(k), that of older (age 55-64) workers with more than 20 years of tenure gained 2.4% in July, while that of younger (25-34), less tenured (1-4 years) workers soared 3.7%, according to estimates from the nonpartisan Employee Benefit Research Institute (EBRI). Bear in mind that the older cohort’s shift (they have larger balances) is generally more influenced by market moves than by contributions.
Year to date, the average 401(k) of the older, more tenured cohort ended July 13% higher, while the younger group is now 20.6% higher than it began the year. A month ago those markers were 10.4% and 16.3% higher on a year-to-date basis.