Thirty-six percent of 401(k) participants used professionally managed accounts in 2012—a percentage double what it was five years earlier and on track to hit 55 percent in five years, according to Vanguard.

“As participants in 401(k) plans, you need to get two things right—you need to save enough and you need to construct good portfolios,” said Jean Young, senior research analyst for Vanguard Center for Retirement Research and co-author of Vanguard’s How America Saves 2013 report. “Sounds easy, but for many individuals these are difficult decisions.”

Of participants who used professionally managed accounts in 2012, 27 percent were invested in a single target-date fund, 6 percent held a single traditional balanced fund and 3 percent used a managed account advisory program, according to the report.

Seventy-three percent of new plan participants for 2012 invested solely in professionally managed accounts. Vanguard expects that number to increase to 80 percent by 2017.

“The number of participants completely turning their portfolio construction over to a professional, or obtaining advice from professionals, is an important trend in the potential future financial security of retirees,” said Young. “It represents a shift in responsibility for investment decision-making away from participants—many of whom may be inexperienced investors—to investment and advice programs that have been vetted by employers as part of their fiduciary obligations.”

The report found that, overall, the average plan account balance rose by 10 percent in 2012, to $86,212, reflecting the effect of both ongoing contributions and market returns. For participants with a balance at both the end of 2007 and the end of 2012—the worst five-year period in the markets in most people’s lifetimes—the median account balance grew by 67 percent. Nearly 90 percent of participants in this group saw their balances rise during this time.

Many 401(k) participants are strong savers, according to the Valley Forge, Pa.-based investment management company. One-fifth of them saved 10 percent or more, 11 percent saved the maximum allowed and 15 percent over age 50 made catch-up contributions in 2012. Taking into account both contributions made by participants and those made by employers to participants’ accounts, the average total savings rate was 10.5 percent in 2012.

On the other end of the spectrum, one-third of participants contributed less than 4 percent. The average participant deferral rate was 7 percent in 2012, down slightly from a peak of 7.3 percent in 2007. The decline is largely due to the default contribution rates set by many automatic enrollment plans, according to Vanguard. Although automatic enrollment raises plan participation rates, the default rates are often set too low—3 percent or less—and thus pull down the overall average savings rate, says Vanguard.

“Some may look solely at plan account balances and underestimate the retirement readiness of Americans, saying that most of us still aren’t financially prepared for retirement,” said Steve Utkus, director of the Vanguard Center for Retirement Research and co-author of the report. “But when you look at the data comprehensively, the fact remains that many Americans are doing a good job accumulating private savings to supplement Social Security in retirement."