Gloria Moss, 65, lost about half of her 401(k) balance in 2008 when the economy took a turn for the worse. So with a wrench thrown into her retirement plans, she continued working full-time as an educator in Florida.
But when the economy started to rebound, and with the help of a financial adviser, she recovered about three-fourths of what she'd lost.
"As a result of that and because the market is better, things have improved. In the last year or so, I think things have come back considerably," Moss said.
Moss had hoped to retire three years ago, and even if she retires now, she'll have to live on $30,000 a year less than what she lives on currently.
"I think I underestimated what I would need, Moss said. "I hope that young people are looking at my story and starting to save more."
Americans have never been the best of savers, especially when it comes to retirement. But a new report finds that the average 401(k) balance has surged past the peak set before the mortgage meltdown.
According to financial services company Fidelity Investments, the average balance from the end of the first quarter was $74,900, a record since the company began tracking this data in 1998. That average balance increased almost 12 percent from a year ago, and 58 percent from the same period in 2009.
But the median balance of a 401(k), which allows people to set aside untaxed dollars that can accumulate tax-free until retirement, was $24,000. That amount is well below what financial planners recommend for those nearing retirement.
The good news is that the average 401(k) balance is significantly higher for account holders who contributed for 10 years continuously: For them, it's $191,000. And of that group, the average balance for those who are 55 or older was $233,800, according to Fidelity.
Also, almost one in 10 participants increased his or her deferral rate, or one's contribution as a percentage of income, the largest percentage since Fidelity began tracking that figure in 2006.
Beth McHugh, vice president of market insights for Fidelity Investments, said that more employees are taking advantage of their 401(k) plans to maximize their savings.
"They're realizing that this is going to be a big part of their retirement nest egg and taking full advantage of it," she said.
Chris Bixby, senior financial planner with Key Private Bank, said three factors likely contributed to the rise in the average 401(k) account.
First, a rebound in the equities market, which is beginning to return to pre-downturn levels, is contributing to an increase in retirement funds. Second, the baby boom generation is becoming more serious about contributing to their retirement funds. And a number of companies have started automatic enrollment in employee 401(k) accounts.
"The automatic enrollment that people are doing is something that's good and beneficial. Education helps, it never hurts," Bixby said. "But forced participation is very good."
Higher contributions to 401(k) accounts may be encouraging news for the country -- especially as legislators consider restructuring Social Security, which has been projected to run out of money by 2037.
But most Americans still fall short of the old rule of saving at least 10 percent of their paycheck. The latest national personal savings rate is 5.5 percent, as reported by the Commerce Department April 29.
But even $74,900, which Fidelity Investments said was the record average 401(k) balance, is still not enough for those nearing retirement age, said Bixby.
"If someone is in their 50s and 60s and that's all of their retirement funds, that is woefully short," Bixby said. "They should have quite a bit more, depending on their income and standard of living."