Faithful 401(k) savers do better than others -- but still not great

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There’s been a lot of consternation lately about the last 10 years having been a lost decade in the stock market.

The Standard & Poor’s 500 stock index fell 24% from 1999 to 2009, a cruel about-face from its more than 315% surge the prior decade. That’s sparked worries that equity returns could be too weak to power 401(k) accounts in coming years, leaving many Americans with insufficient retirement savings.

A report Wednesday from Fidelity Investments shows that at least one group of people made progress over the past decade -- although even their performance wasn’t all that impressive.

Workers who faithfully poured money into their 401(k)s saw their accounts rise almost 150%, to an average of $163,900 at the end of last year from $65,800 a decade earlier.

“For them it’s not a lost decade,” said Beth McHugh, Fidelity vice president of market insights.

But the numbers aren’t quite as rosy as they appear.

Only one-quarter of the gains came from market returns, according to Fidelity. The other three-quarters came from employee and employer contributions.

That’s better than nothing, and it shows the benefits of dutiful saving.

But unless market performance picks up in this decade even dedicated 401(k) savers could come up short in their retirement savings.

-- Walter Hamilton