The average 401(k) plan balance at the end of the first quarter was up 40% from the year-earlier period, according to Fidelity highlights from its first quarter 2010 401(k) figures.

Over the past year, average account balances rose 41% to $66,900 by the end of the first quarter, and average personal rates of return, excluding contributions or withdrawals, were 42%.

“Over the long run, the tried-and-true strategies work best when it comes to saving for retirement,” said James M. MacDonald, president of workplace investing at Fidelity. “Even through all of the volatility of the past couple of years, participants who continued to save in their 401(k) accounts now have a positive return from the start of the downturn in 2008.”

Fidelity also found that 40% of those who either stopped their contributions or scaled back their equity exposure are back in the market. Further, more than 49% of all participants hold all or part of their assets in target-date funds, up from 23% in 2005 and a mere 12% in 2000. Sixty-two percent of those not invested in one of the Fidelity Freedom Funds underperformed the appropriate age-based offering from Fidelity.



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