On average, 401(k) balances have gotten smaller since last year, making a case for the addition of exchange traded funds (ETFs) to be included among the investment choices.

The average 401(k) balance that has been held since 2003 fell 24.3% in 2008, according to the Employment Benefit Research Institute. This includes losses, gains, and employer/employee contributions, Adam Kommel for Mutual Fund Wire reports.

By year’s end, the average balance in retirement accounts was $86,513 for 401(k) type accounts.

The S&P 500 lost 37% in 2008. Overall, equities make up 56% of all assets in retirement accounts, and fixed-income makes up the other 41% of assets.

Target-date funds are showing great growth and popularity, with 31% of those invested choosing those funds. The number of twenty-somethings who were invested in a 401(k)s that chose target-date funds went from 19% in 2007 to 23% in 2008.

Does this leave the door wide open for ETFs? Read about which retirement plans incorporate ETFs here.

For more stories about retirement, visit our retirement category.

Tags: 401(k), Retirement