BOSTON (TheStreet) -- This week, Fidelity Investments offered some encouraging, postrecession news for its retirement client -- that preretiree participants who continuously held a 401(k) plan with them for the past 10 years more than doubled their account balances.
The average account balance for these preretirees, aged 55 years or older, rose to $211,300 by the end of the third quarter of this year from $96,000 a decade ago, the firm says in a Thursday statement.
Preretirees with a contribution rate at or above 8% this year showed average balances increasing more than 130% over the past 10 years, to $291,700 from $125,600.
"The past decade was certainly not a lost decade for participants who remainedcommitted to saving even through all of the market's ups and downs," says James MacDonald, president of workplace investing for Fidelity. "A disciplined, systematic savings approach in a diversified portfolio has been the key to building a sizable nest egg for many preretirees during one of the most volatile decades in history."
The statistics were culled from an analysis of approximately 17,000 corporate Direct Contribution plans and 11 million participants as of Sept. 30.
Fewer participants allocated 100% of their assets to equities at the end of the third quarter (13.1%) as compared with the same period a year ago (14.5%). Strong market returns combined with solid savings rates resulted in average 401(k) account balances increasing 9.4%, to $67,600, by the end of the quarter, up from $61,800 at the end of the second quarter.
Many retirement investors have benefited by diversifying their asset allocationfor more balanced portfolios over the past decade. At the end of the third quarter of this year, the average equity allocation for all participants was 65.4%, down 13percentage points from the end of the third quarter of 2000.
Preretirees shifted even further toward conservative investments. Over the past five years, their average portion of total equity contribution allocations reduced to 57.6% at the end of the third quarter 2010, from 63.6% at the end of the third quarter 2005.
--Written by Joe Mont in Boston.
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