Percentage of Plan Participants Who Increased
Their 401(k) Contribution Rate Doubled in Q4
CHARLOTTE, N.C.,
Feb. 7,
2024 /PRNewswire/ -- Today, Bank of America
Retirement and Personal Wealth Solutions, in partnership with Bank
of America Institute, released its fourth quarter 2023
Participant Pulse (MAP6212241), which found that
average 401(k) account balances rose 15% to $86,280 in 2023, increasing from $75,045 at the end of 2022, due to a combination
of participants contributing higher amounts to their plans, and
increases in the value of investments.1 Nearly 18% of
401(k) plan participants increased their contribution rates last
quarter, up from just over 9% who did so in the third
quarter.2 In addition, year-end 2023 Health Savings
Account balances increased 11% over the prior year.3
The Pulse monitors the behavior of plan participants in Bank of
America recordkeeping clients' employee benefits programs, which
are comprised of more than 4 million participants as of
December 31, 2023.
"We were encouraged to see more plan participants taking
positive actions in their accounts in the fourth quarter," said
Lorna Sabbia, Head of Retirement and
Personal Wealth Solutions at Bank of America. "These insights offer
signs that people are prioritizing their retirement savings, with
more employees increasing their contribution rates and fewer taking
hardship distributions."
The report found that fewer participants borrowed from their
401(k) plan (2.3%, down from 2.5% in the third quarter), and the
average loan per participant declined to $8,210 (down from $8,530).2
Health Saving Account Trends
In addition to
401(k) trends, the Participant Pulse examines
engagement across Health Saving Accounts (HSA) and
overall feelings of financial wellness. Key findings
include:
- Average HSA account balance increased by 11% YoY.
Average account balances increased to $4,380 in 2023, up from $3,930 at year-end 2022, with nearly 4-in-10
accountholders contributing more than they
withdrew.3
- Millennials saved more of their HSAs. Overall, 76% of
HSA contributions were spent on health care expenses, while 24%
were saved. Millennials4 saved 34% of their
contributions, more than any other generation.3
- More men than women invested their HSA contributions.
12% of account holders invested their HSA contributions for future
growth, with men outpacing women (17% vs. 11%).3
Read the full report and methodology here to learn more.
1Comparisons to 2022 reference data derived from Bank
of America Retirement and Benefit Plan Services 401(k) data
platform as of 12/31/2022.
2Comparisons to 2023 Q3 reference data derived
from Bank of America Retirement and Benefit Plan Services
401(k) data platform as of
9/30/2023.
3Reference data derived from
Bank of America Retirement and Benefit Plan Services HSA
data platform as of
12/31/2023.
4Generation defined by the
following birth years: Baby Boomers 1946 – 1964; Gen X 1965 – 1980;
Millennials 1981 – 2000, GenZ after 2000.
About Bank of America Institute
Bank of America
Institute is dedicated to uncovering powerful insights that move
business and society forward. Established in 2022, the Institute is
a think tank that draws on data and analyses from across the bank
and the world to provide timely and original perspectives on the
economy, sustainability, and global transformation. The Institute
leverages the depth and breadth of the bank's proprietary data,
from 69 million consumer and small business clients, 57 million
verified digital users, $4.1T in
total payments in 2023 and $1.27T in
consumer and wealth management deposits. From this robust data set,
the Institute provides a unique perspective on the health of the
economy. It also elevates thought leadership from throughout the
bank that addresses long-term trends and shares these findings with
the general public.
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MAP6365866
Reporters may contact:
Don Vecchiarello, Bank of America
Phone: 1.980.387.4899
don.vecchiarello@bofa.com
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SOURCE Bank of America Corporation