Strong performance in the financial markets sent average 401(k) account balances soaring 14% to $115,000 in 2023, according to T. Rowe Price.
Gains were especially strong among participants aged 20-29, who experienced an increase of 27%, according to the global investment management firm’s annual benchmarking report on 401(k) plan design and participant behavior.
But fewer shared in the gains, as 401(k) plan participation declined from 66% in 2022 to 63% in 2023. Participation remains significantly higher in plans with auto-enrollment (83%) compared to plans without it (36%).
Additional key findings include:
- Plan adoption of Roth contributions reached an all-time high of 93% in 2023, and 14% of participants made Roth contributions.
- The average employee deferral rate remained steady from 2022 to 2023 at 8.4%.
- Participants invested their contributions in a target date product more than any other investment type in 2023.
- Hardship withdrawals increased across all age groups from 2022 to 2023. Participants in their 50s experienced the biggest increase in both average hardship size and quantity.
