Small-business retirement plan balances up 20% since 2007
By Paula Aven Gladych
The average account balance in small-business retirement savings plans increased 20 percent since 2007 and jumped an average of 64 percent over 2008, when balances were at their lowest point.
Fidelity Investments came up with those figures after analyzing six years of data for more than 200,000 small-business accounts with the firm. These plans usually have fewer than 10 employees.
Fidelity found that even during the economic downturn, small-business owners and their employees continued to increase their contribution rates.
The average contribution to these retirement savings accounts increased across the board since 2007, with those using Self-Employed 401ks showing the largest increase of 21 percent to $20,950.
Employer contributions to SEP-IRAs increased 14 percent from 2007, reaching $13,250 at the end of 2012, while average employer/employee contributions to SIMPLE-IRAs increased the least, rising 4 percent to $6,000.
As a result of the increased contributions and market rebound, average balances also have grown since 2007.
The average balance of Self-Employed 401k plans rose from $103,400 in 2007 to $119,500 in 2012—a 16 percent increase over six years—signaling a strong rebound for small-business owners who are using retirement plans for savings purposes. SEP IRA and SIMPLE IRA balances also increased by 17 percent to $71,300 and 26 percent to $31,100, respectively.
Fidelity Investments is one of the world's largest providers of financial services, with assets under administration of $4.1 trillion, including managed assets of $1.7 trillion, as of March 31.
Originally published on BenefitsPro.com