those facts are coming from this report from the employee benefit reseach institute(ERBI).
http://www.ebri.org/pdf/briefspdf/EB...5_K-Update.pdf
a paragraph from page 15:
Definition of 401(k) Account Balance
In any given year, the EBRI/ICI 401(k) database provides a snapshot of the 401(k) account balances across all active participants’ accounts. The database contains only the account balances held in the 401(k) plans at participants’ current employers and reflects the entrance of new plans and new participants and the exit of participants who retire or change jobs. Retirement savings held in plans at previous employers or rolled over into IRAs are not included in the database. Furthermore, account balances are net of unpaid loan balances. Because of all these factors,
it is not correct to presume that the change in the average or median account balance for the database as a whole reflects the experience of “typical” 401(k) plan participants.
I think the consistent group from pages 10-12 are more representative of what a typically 401K would do. The consistent group is a subset where the individuals had been with the same plan for 2003-2008. for this group, average balance went up from 61,106 to 86,513 and median balance went up from 25,507 to 43,700, while the S&P 500 went down 18.4%. looking at figure 6 on page 12, the 50-60 and 60+ group had average balances of 113,070 and 125,052 respectiviely and 150K+ averages for people who have tenures of more 20 years(note: tenure is greater than or equal to how long they have participated in the 401K)
there is also a 1999-2008 consistent group on pages 48-57. the average balance grew from 67,142 to 104,734 and median balance grew from 25,292 to 58,797, while the S&P 500 was down -38.5%.
a paragraph from page 5:
Introduction
Over the past two decades, 401(k) plans have grown to be the most widespread private-sector employer-sponsored retirement plan in the United States, and now serve as the most popular defined contribution (DC) plan, representing the largest number of participants and assets. In 2008, 49.8 million American workers were active 401(k) plan participants.
By year-end 2008, 401(k) plan assets had grown to represent 16 percent of all retirement assets, amounting to $2.3 trillion. In an ongoing collaborative effort, the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI) collect annual data on millions of 401(k) plan participants as a means to accurately portray how these participants manage their accounts.
the other retirement assests are the following
private pensions - 1.9 trillion
non-401K defined contribution plans - 0.4 trillion
IRAs - 3.6 trillion
governement retirement plans - 3.5 trillion
social security trust fund(?) - 2.4 trillion
not sure if they include SS or not, but it gives the 16%. the rest of the numbers came from the federal reserve flow of funds report.
in my opinion, the biggest flaw with 401Ks is the user, and not the plan itself. prevent people from taking loans and cashing out when they switch jobs, opt out instead of opt in, automatic enrollment into an age appropriate life cycle fund would go a long way to helping user do things right.
if the federal government wants to help/force everyone to save for retirement, open up the TSP and force everyone to contribute 5-10%(ramp it up over a couple years so there is no shock) and toss in a match/credit for the poor. at 5%, if you beat inflation by 2%/year, which can be done by putting all the money into the G fund(government bonds), you'll end up with 2-3 times your final salary. at 10%, using L funds(life cycle), you could easily see a lot of people with 10+ times their final salary. this plus the reduced SS that's coming would put many workers into a comfortable retirement.
if it isn't obvious I'm for 401K, so I have highlighted information that supports that conclusion. I'll let the people who want to bash 401Ks pick out their own information.