401(k) plan balances in the US increased 13% in the first half of 2024, reaching $127,100 on average, due to stock market gains.
401(k) plan balances in the US saw significant gains in the first half of 2024, driven by the Wall Street rally. The average balance reached $127,100, a 13% increase from the same period in 2023. The median balance increased by 17% to $29,200. This growth in retirement savings plans can be attributed to record-breaking performance on major stock indexes, driven by enthusiasm surrounding artificial intelligence developments and demand for shares in major tech companies. The savings rate, which represents how much savers set aside from their pay combined with contributions from their employer, also contributed to the increase in 401(k) plan balances. However, some employees are borrowing from their retirement accounts, with 18.3% having an outstanding loan in the second quarter, up from 17.2% in the same quarter last year.