The average self-directed 401(k) balance at Charles Schwab finished the fourth quarter of 2024 at $352,605, up by 13.6% over the course of last year.
That’s according to Charles Schwab’s latest SDBA Indicators Report, an industry-leading benchmark on retirement plan participant investment activity within self-directed brokerage accounts (SDBAs), released this week.
SDBAs at Schwab experienced a 1.5% increase from the third quarter of 2024, when the average balance was $347,437.
SDBAs are brokerage accounts within workplace retirement plans, including 401(k)s and other types of retirement plans, that participants can use to invest retirement savings in individual stocks and bonds, as well as exchange-traded funds (ETFs), mutual funds and other securities that are not part of their retirement plan’s core investment offerings.
Strong market performance in the fourth quarter capped the second consecutive year in which the S&P 500’s gain was greater than 20%. Mega cap stocks outperformed and strengthened overall returns ending 2024 on a high note, Schwab’s report said.
Allocation trends
Overall, participant holdings in the fourth quarter for Schwab SDBAs were similar to the third quarter.
• Equities: Equities continued to hold the majority of assets at 35.7%. The largest equity sector holding was Information Technology at 37.7%; Apple (10.3%) and Nvidia (10.3%) remained the #1 and #2 holdings, while Tesla (8.1%), Amazon (5.0%) and Microsoft (3.4%) continued to round out the top five.
• Mutual funds: Mutual funds remained the second largest holding at 27.0%, with the largest allocation going to large-cap stock funds at 34.8%, followed by money market funds (16.7%) and taxable bond funds (14.5%).
• ETFs: ETFs held 26.0% of participant assets. Investors allocated the most dollars to U.S. equity (52.8%), followed by U.S. fixed income (12.8%) and international equity (10.4%).
• Cash and Fixed Income: Cash and equivalents held 7.2% of participant assets while 4.1% of assets were held in fixed income.
More report highlights
• Advised accounts held higher average account balances compared to non-advised accounts, $537,037 vs $311,627.
• Gen X again had the most advised accounts (52.1%), followed by Baby Boomers (22.5%) and Millennials (23.7%).
• Gen X made up 46.7% of SDBA participants, followed by Baby Boomers (24.4%) and Millennials (25.9%).
• Boomers again had the highest account balances at $579,278, followed by Gen X at $358,480 and Millennials with $129,473.
• On average, participants held 11.8 positions in their SDBAs at the end of Q4 2024, similar to the third quarter.
• Trading volumes also remained similar to the third quarter, with an average of 14.8 trades per account.
The SDBA Indicators Report includes data collected from approximately 301,000 retirement plan participants who currently have balances between $5,000 and $10 million in their Schwab Personal Choice Retirement Account. Data is extracted quarterly on all accounts that are open as of quarter-end and meet the balance criteria.Data contained in the quarterly report is from the fourth quarter of 2024, and can be found here, along with prior reports.
SEE ALSO:
• 401(k) Millionaire Ranks Grew 27% in 2024: Fidelity
• Self-Directed 401(k) Balances Up 21% in Past Year: Schwab Report
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.
