The answers: Utah, North Dakota, 30.3%, South Dakota, North Dakota, 6.2% and $22,100.
These are among the key findings from a recent analysis of 401k data, titled “The Impact of COVID-19 on Retirement Savings,” from Denver-based LT Trust, a national provider of trust and custodial services, including open architecture 401k plans that administers 5,000+ plans with $5.1 billion in assets.
In fact, the study found average retirement contributions and balances for employees in all 50 states were up from 2019 levels.
“Rather than surveying workers directly to learn their opinions regarding how COVID-19 has impacted their retirement plans, we wanted to go directly to the data,” LT Trust’s blog post said. “By reviewing the 401k’s of 59,000 American workers across all 50 states during 2020, we discovered that those who were fortunate enough to remain employed during this historic economic downturn were actually able to save more than they had in previous, non-pandemic years that saw the economy fare far better overall.”
No state saw a bigger increase in average 401k balances than Utah, with that startlingly large increase of 47.6%. LT Trust had Utah pegged for an average 2020 401k account balance of $33,984, up from $23,022 in 2019.
Hawaii enjoyed the second biggest increase in average 401k account balances, going from a paltry $18,472 in 2019 to $26,073 in 2020 for an increase of 41.2%. Third-ranked Connecticut’s 39% increase was a little more impressive, given that the average account balance jumped from a healthier $63,310 to $88,024. Rounding out the top five in terms of average 401k account balance growth by percentage were Indiana (38.4% growth from $26,834 to $37,126) and Maine (38.4% growth from $30,171 to $41,745).
Giants California (6th with 37.5% growth from $34,607 to $47,573) and New York (9th with 33.7% growth from $36,722 to $49,111) also made the top 10 for 401k growth.
On the bottom end of the spectrum—in more ways than one—was North Dakota. That state’s average 401k account growth ranked 50th at 11.5%, and its average 2020 account balance of just $20,090 was lower than any other state as well. Mississippi ($25,686) and Hawaii ($26,073) were the only other states that didn’t have average 401k account balances of at least $30,000.
That’s a stark contrast with its neighbor South Dakota, which while only ranking 43rd in growth between 2019 and 2020 at 21.7% nevertheless boasts by far the highest average account balance in 2020 at $106,187. That’s well above Delaware and New Jersey, who have the second- and third-highest average 401k account balances at $99,662 and $90,705. Connecticut ($88,024) and Minnesota ($85,325) round out the top five, but notably, Arkansas ranks sixth at $84,869.
Despite growth across the board, the gap between what men and women contribute and have in their 401ks once again reared its ugly head in the data. The 401k contributions of males increased 3% more than their female counterparts. The average female 401k balance in 2020 of $47,277 was $22,100 smaller than males ($69,377).
Employees aged 21-30—who obviously at their young ages have lower 401k account balances than their older counterparts—saw the largest average balance increase, at 77% in 2020. Employees in the 31-40 age group saw their balances increase 52% while older age groups with larger beginning balances predictably saw smaller (but still impressive) increases. The 41-50, 51-60 and 61-70 age groups saw increases of 33%, 33% and 29%, respectively.
“While there is no question that millions of Americans—from business owners and their employees to investors and retirees—have been negatively impacted by the COVID-era economy, 401ks were, by and large able to weather the 2020 storm,” the LT Trust blog concluded. “This is likely due to a combination of economic anxieties and fears resulting in larger employee contributions and an increase in disposable income from the shift to remote work (ie: fewer trips to the gas station, not as many to-go coffees and restaurant lunches, and far fewer post-work trips for drinks) and the widespread shutdowns that left many with nothing to do but stay at home.”
As more and more cities, states, and workplaces ease restrictions and open up in 2021, LT Trust said it is worth monitoring whether or not these super-saver trends continue or if 401k contributions and balances decrease from 2020.