This is calculated to make everyone want to invest in the stock market, which is like being on the Titanic.

Who wouldn't want free money? But EVERYONE can't make free money, it has to be earned from someone. It doesn't come out of thin air. If every Tom, Dick, and Harry is making 8% annual interest on the stock market, who is actually doing the work to earn that money?

401(k) balances on the rise

New study finds those who saved from 1999 to 2005 reaped the rewards of discipline.

August 24 2006: 2:13 PM

NEW YORK (CNNMoney.com) -- For workers who saved consistently in their 401(k) plans between 1999 and 2005, the average 401(k) balance rose 50 percent to $102,014, according to a study released Thursday.

The study, conducted by the Employee Benefit Research Institute and the Investment Company Institute, attributed the growth in balances to workers' consistent contributions throughout the six-year period, which included one of the worst bear markets in over 70 years, combined with strong equity returns on those contributions since 2002.

The average account balance in 2005 among workers in their 20s who have had accounts since 1999 was $24,169. For those in their 30s, it increased to $50,930, while for those in their 40s it rose to $91,848. Workers in their 50s had an average account balance of $127,766, while the average for those in their 60s was $140,957.

In terms of asset allocation among all 401(k) account holders, 68 percent of 401(k) assets are invested in stocks - either stock funds or the stock portions of balanced funds, which also invest in bonds.

But among participants, 15 percent have no money invested in stocks.

The portion of 401(k) assets held in company stock fell to 13 percent from 19 percent in 1999. Among recently hired participants, their holdings in company stock fell, too, although for 11 percent of them, company stock makes up more than half of their account balance.

Retirement experts have cautioned 401(k) participants to keep no more than 10 percent of their account balance in their employer's stock - less if possible - to avoid overexposure. Their reasoning: Workers' incomes are tied to the company's fortunes and the funds in their accounts may already invest in the stock.

Meanwhile, the number of newly hired participants investing in lifecycle funds grew to more than 40 percent up from 29 percent of new hires in 1998. Lifecycle funds reallocate investment risk and grow more conservative as fund investors move closer to their target retirement date.

In terms of borrowing from their 401(k)s, 19 percent of loan-eligible participants had an outstanding loan in 2005 and the average unpaid balance was $6,821, or 13 percent of assets in the average account.

Earlier this month, President Bush signed into law the Pension Protection Act of 2006, which included a number of provisions intended to boost savings in 401(k)s, including making it easier for companies to automatically enroll 401(k)-eligible employees.