There isn’t any query 2022 was a tough yr for traders.

With record-high inflation, financial uncertainty and aggressive rate of interest hikes from the Federal Reserve to fight rising costs, shares took a beating. All three of the most important indexes had their worst yr since 2008: The S&P 500 Index dropped 19.4%, the Dow Jones Industrial Common sank 8.8% and the Nasdaq Composite Index misplaced 33.1%.

But most 401(ok) plan contributors rode out the storm — and lots of elevated their contributions, based on a new evaluation from Vanguard that is a preview of its annual How America Saves report.

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As of year-end 2022, the typical participant account steadiness at Vanguard was $112,572, down 20% from a yr earlier, the analysis reveals. The median steadiness — half had been above, half under — was $27,376 on the finish of the yr, a 23% lower.

On the identical time, although, 39% of contributors’ deferral price — the portion of their paycheck directed to their 401(ok) account — climbed increased, in contrast with 9% of traders who decreased their contributions. Whereas many initiated the rise on their very own, greater than half of the boosts got here from the plan’s yearly automated escalation.

“Regardless of financial headwinds, we had been happy to see that participant conduct in retirement plans remained in keeping with earlier years, and most contributors continued to keep up a long-term view,” mentioned Dave Stinnett, head of strategic retirement consulting at Vanguard.

Moreover, simply 2% of the traders in target-date funds made any exchanges (59% of contributors are in these funds). Amongst these not in target-date funds or different professionally managed allocations, solely 6% did any buying and selling, the bottom level in 20 years, based on Vanguard.

And, though hardship withdrawals ticked up, they continue to be a small share of all contributors. Final yr, 2.8% took such a withdrawal, in contrast with 2.1% in 2021.

“The uptick … could have been pushed by people’ private finance conditions, with U.S. households going through some robust financial challenges in 2022,” Stinnett mentioned. “A number of authorities strikes since 2018 have additionally loosened the principles for taking the distributions, so we imagine that will have additionally been an element within the enhance.”

In the meantime, financial headwinds stay. The most recent inflation studying confirmed a 6.4% enhance over the past 12 months — which stays far above the Fed’s goal price of two%. This implies further price hikes are on the way in which, which makes the price of borrowing costlier for customers and companies.

“The massive query round inflation is can the Fed get that underneath management with out costing individuals their jobs and inflicting additional declines out there,” mentioned licensed monetary planner Douglas Boneparth, president of Bone Fide Wealth in New York.

Whereas all three of the most important inventory indexes have trended upward since early January, it is unattainable to know with certainty whether or not the upper momentum will proceed. Via noon Friday, the S&P has risen about 6% in 2023, the Dow has climbed 1.7% and the Nasdaq has gained almost 13%.

“We’re beginning out the yr on a optimistic word … which is a pleasant reprieve from the carnage that was 2022,” Boneparth mentioned.