401(k)s did well in 2024, but not just due to market gains. You deserve credit, too

Last year was a good year if you were among the tens of millions of employees who put their savings to work in a 401(k) plan.

Last year was a pretty good year if you were among the tens of millions of employees who put their savings to work in a 401(k) plan. Sure, strong returns on the S&P 500 helped. It rose nearly 25% for the year. Same goes for the Nasdaq, which was up about 32%. And bonds made small gains — the S&P Aggregrate Bond Index, for instance, increased by roughly 2.25%. But you deserve some credit, too. Based on the latest data from Fidelity and Vanguard, in 2024 many employees increased their savings rates, participants stayed diversified, and the vast majority didn’t tap their accounts for a loan or hardship withdrawal. Also helpful: Many benefited from 401(k) plans that are now better designed to encourage sustained savings and diversified investing. Fidelity reported that as of the end of the fourth quarter in 2024, the average 401(k) balance had risen by 11% for the year to $131,700. That’s based on its database of more than 24.5 million accounts.