Cecily O'Connor
RedwoodAge.com

The average 401(k) balance hit $74,900 at the end of the first quarter, jumping 12 percent from a year ago, and 58 percent from 2009, according to Fidelity Investments.

Despite the big dips over the past decade, the amount represents an all-time high since the financial services giant began tracking account balances in 1998.

In addition, one in 10 participants increased his or her deferral rate - which refers to the percentage of a participant’s salary saved - during the first quarter. And that's the highest percentage since 2006.

Still, many boomers that turned 65 this year remain dubious about their ability to retire comfortably. Most of their doubts relate to volatile stock market conditions, weakness in Social Security and Medicare, longer life expectancies and rising health costs.

Consider that the average nursing home stay runs more than $77,000 per year, well over the amount of the average 401(k) balance. Even more concerning is that nursing home tab could rise to over $150,000 per year by 2030, assuming an annual inflation rate of 3 percent.

Recent Gains
Stock market gains put wind to 401(k) sails during the first quarter, with the Dow Jones rising 6.4 percent and the S&P 500 Index gaining 5.9 percent during the first three months of 2011. Fidelity also attributed the positive data, in part, to stepped up employee education and engagement efforts that help workers better plan for big investment milestones like retiring or changing jobs.

Education is "designed to combat inertia and increase the level of engagement by communicating to participants during key life events very simple yet actionable ways to help them improve their retirement readiness," said Carolyn Clancy, executive vice president at Fidelity.