Is Your Retirement Portfolio Making New Record Highs?
The credit meltdown of yesteryear ferociously ripped through the economy and decimated retirement accounts across Main Street. Millions of Americans felt the brute force of a stock market crash for the second time in only a decade. While the nation is left with the weakest economic recovery in history despite years of unprecedented intervention from central banks, some Americans are witnessing a rebound.
Investors who stayed in the market over the past five years are experiencing a wealth effect in their retirement portfolios. The average 401(k) balance grew to $89,300 in the fourth quarter of 2013, according to a new report from Fidelity, the nation’s largest 401(k) provider. That represents a 15.5 percent gain from one year earlier and a new record high. Since the stock market reached historic lows in March 2009, the average 401(k) balance has nearly doubled from only $46,200.
The most debated stock rally in history is largely responsible for the rebound in retirement accounts. Fidelity finds that 78 percent of the year-over-year gain is due to equity prices, while 22 percent of the growth is from employee and employer contributions, including company matches.