"The average account balance climbed to a record level in 2024, but the share of workers tapping those same accounts under financial duress also hit a record. The two trends ran in parallel, and the gap between them is the story of how the average American household experienced the past year."
"According to Vanguard, the average account balance rose 10% in 2024 to $148,153, lifted by stock prices that gained 23% during the year. The median balance, which strips out the pull of very large accounts, was $38,176."
"Among participants, those with balances under $10,000 make up 28% of accounts and borrowed an average of 36% of their balance, the highest share of any balance group."
"Auto-enrollment plans posted 94% participation, versus 64% for voluntary plans, but auto-enrollment can put a low-income worker into a plan without resolving the cash-flow problem that later forces them to withdraw."
In 2024, the average 401(k) account balance reached $148,153, a 10% increase, while the median balance was $38,176. Despite rising balances, hardship withdrawals rose to 4.8%, with 35% aimed at preventing foreclosure or eviction. Participation in workplace plans varies significantly by income, with 95% of those earning over $150,000 participating compared to only 31% of those earning under $15,000. Auto-enrollment plans have high participation rates, but they do not address underlying cash-flow issues for low-income workers.
Read at 24/7 Wall St.
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