photo credit: Daniel Greene
I’m getting to this good news a little late, but it’s still worth noting. Fidelity Investments reported last month that more workers increased the amount of money they put into their 401(k) accounts during the second quarter than decreased their contributions. In the three months ended June 30, 4.7% boosted their contributions, with just 3% decreasing it.
That was a switch from the previous three quarters, when workers with decreasing contributions had outnumbered those raising them. In those earlier quarters, over 6% of participants cut their contributions.
Note that we’re talking about changes made on the margins, since the vast majority of 401(k) contributors don’t make any changes month to month or even year to year. And that’s a good thing. Those who keep on investing in good years and bad will ultimately make more money than those who try to time the markets.
Maybe it’s time to look at your own 401(k) contribution rate and see if you might be able to boost it a percentage point or two. If you need some inspiration, use MSN’s Retirement Planner to see how much you should be saving.
Other findings from Fidelity:
- The average 401(k) account balance rose 13.5 percent in the second quarter from the end of the first quarter in 2009 to $53,900. The increase was primarily driven by increases in the stock markets as well as worker and employer contributions.
- About 68 percent of the money contributed to 401(k)s went to stocks, which is down from 75 percent in the past few years and a high of more than 80 percent in 2000.
- About 42 percent of contributions went to domestic and international stocks; 24 percent to blended or lifecycle investments; 8 percent to company stock; 24 percent to conservative investments, such as money markets and fixed-income assets.
Need more info? Check out some of my advice on saving and retirement:
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