Patience Rewarded? Retirement Account Balances Hit Record Highs

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People often say, “It takes money to make money.” However, it takes patient money to make long-lasting wealth. While it certainly hasn’t been easy in recent years, investors who were patient during the credit meltdown and didn’t deviate from their long-term strategies reaped the most financial benefits.

In the wake of a resilient stock rally, retirement accounts are at all-time highs. Employees who have been active in their 401(k) plans for the past decade have seen their balances rise by an average of 15 percent each year to $246,200, according to a new analysis by Fidelity. The quarterly average balance, which includes all employees at various stages of their careers, rose 12.9 percent to a record $91,000, compared to $80,600 in the second quarter of 2013. Furthermore, the average balance in a Fidelity Individual Retirement Account also reached a record high of $92,600.

Of course, the path to record-high retirement balances is not exactly unspoiled. Investors have endured back-to-back financial bubbles, dismal employment conditions, and unprecedented actions by the Federal Reserve that are still in process to aid the weakest economic recovery in modern history. Nonetheless, the most-hated stock rally in history accounted for 77 percent of the 401(k) balance increase over the past year, while 23 percent was due to employee and employer contributions.