Did Your 401(k) Lose More Money Than Your Peer's?

See if your retirement account balance fared worse than the national averages

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Nearly all Americans watched their 401(k) balance dwindle in 2008. Some people toss their 401(k) statements directly into a drawer, thinking it’s better not to dwell on the losses. But if you’re the type of person who likes to pore over the downward trend graphs, here’s a snapshot of the national 401(k) losses.

The median 401(k) rate of return in 2008 was negative 28.3 percent, according to a study of 2.7 million employees eligible for 401(k) plans by human resources consulting firm Hewitt Associates. The average 401(k) balance dropped from $79,600 in 2007 to $57,200 at the end of 2008. Only 11 percent of employees broke even or saw a gain in their 401(k) accounts, while about 44 percent of 401(k) participants lost 30 percent or more of their savings. Workers in their 50s suffered the worst losses.

Average 401(k) Balance by Age Group

Age         2007 Balance        2008 Balance

20s          $9,190                      $6,690

30s           $40,990                   $27,360

40s           $93,350                   $62,580

50s           $138,660                 $99,420

60+            $115,700                $93,470

Source: Hewitt Associates

Despite the catastrophic losses, participants continued to save. Just 5 percent of 401(k) participants stopped contributing in 2008. The average 401(k) contribution rate dropped only slightly from 7.7 percent in 2007 to 7.4 percent in 2008. About the same number of employees increased their savings rate last year (15.4 percent) as decreased it (14.9 percent).

Also find out: Is Your 401(k) Riskier Than Other People Your Age?