The average investor lost nearly 25 percent of investments during the economic collapse that began its nosedive in late 2008. Workers who held 401(k)s suffered a 24.3 percent average drop in their account balance during this bear market.

The Employee Benefit Research Institute studied a five-year period of 401(k) investors, finding that before the plunge in the 2009 market the average 401(k) account balance increased at an average annual growth rate of 7.2 percent. The mid-point 401(k) account balance increased at an average annual growth rate of 11.4 percent during that same time.

Of the participants in the study, 56 percent of assets were invested in mainly in stocks – equity securities through equity funds, the equity portion of balanced funds, and company stock. Another 41 percent were in fixed-income securities such as stable-value investments and bond and money market funds.

Recently hired 401(k) participants followed an emerging trend of being less likely to hold employer stock — almost 23 percent of the account balances of recently hired participants in their 20s were invested in lifecycle funds or “target-date” funds designed to simplify investing and automate account rebalancing.

In 2008, 49.8 million America workers were involved in 401(k) plans. Over the past two decades, 401(k) plans have grown to be the most widespread private-sector employer-sponsored retirement plan in the United States and at the end of 2008 represent 16 percent of all retirement assets.

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