Between 1999 and 2005 the average 401(k) account increased 50 percent despite the worst bear market since the Great Depression. In regards to those people who consistently contributed to their 401(k)’s “the average account rose from $67,785 at year-end 1999 to $102,014 by year-end 2005.”
Interestingly the majority of 401(k) assets continue to be invested in equity securities instead of bonds, money market or other more conservative funds. A positive sign is the percentage of company stock representing total assets continues to fall in 2005 due to “recently hired 401(k) participants who tend to hold lower concentrations of their accounts in company stock.”
Loans of 401(k) money are also low among people in there sixties, only 90 percent, and of the ten percent that have loans the amount of the loan is small compared to the overall account value. Aside from extreme emergencies taking a loan out on your 401(k) is not a good idea.
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