from CNN, a far right channel
The average balance in employer-sponsored savings plans last year was $112,572, well below the $141,542 recorded in 2021.
That’s according to the latest annual report, “How America Saves,” from investment firm Vanguard, which serves as record keeper for defined contribution plans that, combined, have nearly 5 million participants with a median age of 43. Such plans include 401(k)s and 403(b)s, as well as a much smaller universe of plans that employers simply put money into for employees and then employees direct how that money is invested.
“Vanguard participants’ average account balances decreased by 20% since year-end 2021, driven primarily by the decrease in equity and bond markets over the year,” according to the report.
Congress passes new retirement rules. What these 7 changes mean for you and your 401(k)
The numbers look worse if you consider the median balance, which was just $27,376 last year, down from $35,345 in 2021. The median in some ways is a truer read on the state of employees’ retirement savings since it is the middle point — meaning half of accounts have higher balances, and half have lower ones.
Some participants tapped their retirement savings early — either through a withdrawal or a loan. Vanguard found that in plans where they had the option, 2.8% of participants made hardship withdrawals, the highest since 2018. Given last year’s economic headwinds, “the increase … may signal that some households faced additional financial stress,” Vanguard said, noting that about a third of hardship withdrawals were to avoid home foreclosure or eviction, and roughly another third were due to medical expenses.
Meanwhile, another 3.6% of participants made non-hardship withdrawals. And 12% borrowed money — an average of $10,500 — from their accounts.
The average balance in employer-sponsored savings plans last year was $112,572, well below the $141,542 recorded in 2021.
That’s according to the latest annual report, “How America Saves,” from investment firm Vanguard, which serves as record keeper for defined contribution plans that, combined, have nearly 5 million participants with a median age of 43. Such plans include 401(k)s and 403(b)s, as well as a much smaller universe of plans that employers simply put money into for employees and then employees direct how that money is invested.
“Vanguard participants’ average account balances decreased by 20% since year-end 2021, driven primarily by the decrease in equity and bond markets over the year,” according to the report.
Congress passes new retirement rules. What these 7 changes mean for you and your 401(k)
The numbers look worse if you consider the median balance, which was just $27,376 last year, down from $35,345 in 2021. The median in some ways is a truer read on the state of employees’ retirement savings since it is the middle point — meaning half of accounts have higher balances, and half have lower ones.
Some participants tapped their retirement savings early — either through a withdrawal or a loan. Vanguard found that in plans where they had the option, 2.8% of participants made hardship withdrawals, the highest since 2018. Given last year’s economic headwinds, “the increase … may signal that some households faced additional financial stress,” Vanguard said, noting that about a third of hardship withdrawals were to avoid home foreclosure or eviction, and roughly another third were due to medical expenses.
Meanwhile, another 3.6% of participants made non-hardship withdrawals. And 12% borrowed money — an average of $10,500 — from their accounts.
