Workers who had already been investing in their 401(k) for at least five years through 2008 saw their balances drop an average of 24% last year, compared with the S&P 500’s sharp 37% decline, the Investment Company Institute and the Employee Benefit Research Institute said.

Because of their continued contributions, over the past five years from 2003 to 2008, their average account balance increased 7.2% a year. Among these consistent participants, the average account balance rose from $61.106 at the end of 2003 to $86,513 at the end of last year.

However, among all participants in the ICI/EBRI database of 24 million participants, the average account balance fell 30.5% last year from $65,454 at the end of 2007 to $45,519 at the end of 2008.

“Retirement savers, like most investors, suffered during 2008, one of the deepest bear markets in modern history,” said Sarah Holden, senior director for retirement and investor research at the ICI. “But the growth in account balances among consistent participants over five years highlights the benefits of a regimen of disciplined saving in workplace retirement plans.”

The study also found that loan activity has remained at 2006 and 2007 levels, with 18% of those eligible for a loan having one outstanding. The bulk of 401(k) assets, 56%, also remained invested in stocks, but 41% was in fixed income, including bond and money market funds.

Also, the percentage of money going into company stocks has continued to shrink, declining to 9.7% in 2008, down from 10.6% in 2007.

Interestingly, 31% of participants held target-date funds in 2008, but only 7% of their assets were invested in such funds. But 60% of new hires were in balanced funds, including target-date funds, up from 53% in 2007.

In total, almost 50 million Americans were invested in a 401(k) plan last year, with assets totaling $2.3 trillion.

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