A strong year for stocks plus a slight late-year rise in contribution rates helped 401(k) account balances to a healthy 16% increase in 2024 (compared to year-end 2023) for retirement plan participants recordkept by Bank of America.
New Q4 data from Bank of America’s quarterly “Participant Pulse” released Tuesday provides a snapshot of plan participants’ retirement readiness, examining 401(k) and Health Savings Account (HSA) contribution rates and account balances, as well as participants’ overall financial wellness.
“This quarter, significantly more participants increased their retirement contribution rate, led by younger generations. Although the quarter closed with an average lower retirement account balance, it was up more than 15% compared to a year earlier,” the 4Q 2024 Pulse said. “Compared to last quarter, fewer participants borrowed from their retirement account, and loan amounts were smaller; hardship distributions were fairly comparable.”
The average BofA 401(k) account balance at year-end 2024 was approximately $100,300, down slightly from Q3 ($103,000), but up 16% compared to year-end 2023 ($86,000).
The average contribution rate was 6.6%, up from 6.5% at mid-year. While 3-in-4 participants kept their contribution rate consistent, 21% of participants increased their rate in Q4 (up significantly from 9.7% in Q3), led by Millennials. The average contribution during the quarter was $1,420, comparable to Q3 ($1,440) but up 8% from 4Q23 ($1,310).
Today’s report also shows fewer participants borrowed from their workplace plan in Q4 (2.2% vs. 2.5% in Q3). Loan amounts were smaller ($8,950, down slightly from $9,100 in Q3 2024) and hardship distributions were fairly comparable (0.74% compared to 0.72% in 3Q). “On a positive trending note, for the eighth consecutive quarter, we see a decline in participants with a loan in default,” the Pulse report noted.
Of participants with a loan, those with a loan in default as of 4Q was 11.1%, down from 11.4% in Q3 and from a year prior (12.6%).
Distribution inquiries and transactions accounted for about a third (32%) of all 401(k) participant calls for assistance during Q4 2024. Loans and hardships accounted for 25% of calls.
HSA balances up

BofA’s Q4 2024 Participant Pulse report also reveals that Health Savings Account (HSA) balances grew, with Gen X employees continuing to contribute more than other generations. The average HSA account balance at year-end was $5,000, up year-over-year from $4,400. In Q4, on average, Gen X employees contributed the most (nearly $2,000), while Millennials were most likely to have saved their HSA funds (35%).
Only 14% of account holders invested their HSA for future growth, meaning many employees are not taking advantage of an HSA’s tax-advantaged investing potential.
Finally, the Pulse report found the average overall financial wellness score was 49, consistent with Q3 and slightly down from 51 at year-end 2023.
The gender gap remains with women continuing to trail men in their financial wellness score (46 vs. 52, respectively).
SEE ALSO:
• 401(k) Balances at Bank of America Spike 11% in Q3
• Record High Number of 401(k) Millionaires, Average Account Balances at Fidelity
• Lively Reports 35% Surge in HSA Balances
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.