Get a 654 percent return by sticking with your 401(k)

It pays to stick with your retirement plan.

A new analysis by Fidelity Investments found that investors who have been in their company’s 401(k) plan for 15 years straight saw their average balance grow from $43,900 in 2001 to $331,200 as of the end of September. That works out to a 654 percent return over 15 years or an annualized 14 percent.

Fidelity’s analysis is based on more than 22,000 corporate retirement plans with 14.5 million participants.

“It’s the first time we have the data to study people who have been in their 401(k)s for 15 years,” said Jeanne Thompson, Fidelity’s senior vice president of workplace investing. “It shows the benefits of setting a plan and keeping with it.”

Not all those gains came from the stock market. Roughly 55 percent of the returns in the 15-year club can be attributed to market performance. The rest came from plan contributions from workers and their employers. By comparison, the S&P 500 returned an annualized 7 percent over the same period.

The employer match can make a significant difference to your retirement savings. The average employer matching contribution at a large company 401(k) plan is 50 cents on the dollar on the first 6 percent of pay, according to the Vanguard Group.

One in 4 employees misses out on receiving the full company match by not saving enough — leaving an average of $1,336 on the table each year, according to investment advisory firm Financial Engines.

“People who have been in the same 401(k) for 15 years are an elite group. They are the aristocrats of the labor market.”-Anthony Webb, research director of the Retirement Equity Lab at the New School’s Schwartz Center for Economic Policy Analysis

Not every employee is fortunate enough to have a workplace 401(k) plan or stay with the same job for 15 years.

More than half of American workers — roughly 55 million — don’t have access to a retirement savings plan on the job. Plus, only 17.4 percent of American workers have been with the same employer for more than 15 years, according to the Bureau of Labor Statistics.

“People who have been in the same 401(k) for 15 years are an elite group. They are the aristocrats of the labor market,” said Anthony Webb, research director of the Retirement Equity Lab at the New School’s Schwartz Center for Economic Policy Analysis.

While a $331,200 nest egg in a 401(k) plan over 15 years is impressive, it is not the norm.

Last year, the median retirement plan balance for workers age 45 to 54 was just $43,700, according to an analysis by the Vanguard Group.

However, longer time on the job does typically lead to more retirement savings. Vanguard found that workers who had been with an employer for 10 years or more had a median retirement account of $95,638.

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