401(k) participant balances recordkept by Bank of America grew by 11% during the third quarter of 2024, the company reported on Tuesday.
Quarterly data from BofA’s Q3 2024 Participant Pulse survey, providing a snapshot of plan participants’ confidence and sentiment toward retirement planning and financial wellness, showed the average 401(k) participant account balance in September was $102,660. That’s an 11% increase compared to Q2, when the average account balance was $93,054. At year-end 2023, the average 401(k) account balance was about $86,000.
“Overall, the data for Q3 showed positive trends around participants’ 401(k)s with an 11% increase in account balances,” said Lisa Margeson, Managing Director, Workplace Benefits Retirement Research at Bank of America. “Positive market forces likely helped grow participant balances, including the easing of interest rates late in the quarter. These positive trends signal growing retirement readiness among American workers, fueling our optimism for the future.”
The average contribution rate was 6.6% in the third quarter, up slightly from 6.5% in Q2. In Q3, 88% participants kept their contribution rate consistent. More Gen Z (19.7%) and Millennial (10.6%) participants increased their contribution rate compared to other generations.
401(k) loans also decreased during the quarter, as 2.5% of participants borrowed from their workplace plan in Q3, down from 2.7% in Q2. The average loan per participant in Q3 was $9,100, comparable to 2Q ($9,300).
Of the more than 400,000 participants who completed a financial wellness assessment, 59% said they live paycheck to paycheck. More men than women say they have money left over at the end of the month, the Participant Pulse report noted. About one-third of women (35%) say they have money left over, compared to almost half (46%) of men.
Health Savings Accounts
BofA also reported that Health Savings Account (HSA) balances grew, with Gen X employees contributing more than other generations. The average account balance was $5,130, up from $4,930 in Q2. Gen X employees contributed the most ($1,570) while Millennials saved the most (34%).
The report also found 14% of account holders are investing for future growth, consistent with Q2, meaning many employees are not taking advantage of an HSA’s earning potential.
When it comes to how HSA contributions were used, 75% were spent on health care expenses (up from 73% in Q2) and 25% were saved.
See the full Q3 Participant Pulse survey here.
SEE ALSO:
• 401(k), HSA Account Balances Grow in Q2: Bank of America
• 401(k) Account Balances See Marginal Increase in Q1
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
