NEW YORK (CNN/Money) - The average 401(k) balance fell for a second year in a row during 2001, according to a new study released this week.

Assets in the average 401(k) account dipped $4,528 to $36,390 in 2001, according to the review by Boston consultant Cerulli Associates. Overall, 401(k) assets lost $101 billion to end 2001 at $1.64 trillion.

It was the second year of red ink for 401(k)s in their 20-year history. Last year, Cerulli shocked the retirement industry when its annual review showed that the average balance had dropped to $41,919 in 2000 from $45,681 in 1999, the first loss for 401(k)s in two decades. 401(k) assets have shed a total of 10.1 percent, or $279 billion, in the past two years.

"We had back-to-back negative years in the market, and this mimics the market," said Doug Flynn, a certified financial planner in New York. "It's very discouraging for people."

The study found that, once again, the vast majority of 401(k)s are tiny, with 100 participants or fewer. About 87.5 percent of the 399,944 plans fell in this category, with an average individual balance of $20,909 or less in 2001. In 2000, the average balance for such plans was $23,905.

The average for all 401(k)s was $36,390 because of the sizeable assets of 401(k)s at large corporations. The 1,043 "mega" plans represent 0.3 percent of all 401(k)s. The individual balance at the largest of these plans averaged $57,139 in 2001. In 2000, that number was $61,804.

The 401(k) wasn't the only retirement plan to suffer. Total retirement assets, which includes profit-sharing plans, traditional pensions, and IRAs, lost a combined $410 billion in 2001, falling to $6.6 trillion from $7 trillion in 2000. In 1999, the figure stood at $7.3 trillion.

The IRA market, now the single largest holding pen for retirement assets, withstood losses better than other types of plans, losing $73 billion in 2001 and $13 billion in 2000, according to Cerulli. IRA assets totaled $2.6 trillion in 2001, compared with $2.2 trillion in 401(k)-type plans and $1.8 trillion in traditional pensions.

Flynn said the declines in retirement assets underline the importance of having a diversified portfolio, with exposure in large-, mid- and small-cap stocks, international stocks, and bonds. (Click here for more tips on how to manage your 401(k). And click here for MONEY's Retirement Guide 2002.)

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And if anything, the second year of losses indicates that this is a time to buy -- while everything is cheap.

"If you're more than five or 10 years away from retirement, this is a buying opportunity," Flynn said.

Despite the losses, Cerulli found that higher savings limits for 401(k)s and IRAs will lead to a dramatic increase in asset sizes in the coming years. Thanks to the Tax Relief Reconciliation Act of 2001, the federal limit on annual contributions to 401(k)s increased from $10,500 in 2001 to $15,000 in 2006. This year, the limit is $11,000.

The Tax Relief Act also offered catch-up provisions for workers 50 and older. Starting this year, if you're 50 or older, you may contribute an additional $1,000 above your maximum allowable 401(k) contribution, a catch-up amount that will increase gradually to $5,000 by 2006. (Click here for more on those levels.)

Cerulli found that the changes could lead to more than $956 billion in new money flowing into the retirement market in the next decade.