401k Savings Rates Reach (Yet Another) Record High

Market turbulence be damned, 401k participants are stepping up their savings game this year.

According to Fidelity Investments, 401k investors’ total savings rate (including both employee and employer contributions) hit a record-high of 13.2 percent this quarter, continuing an upward trend that began in 2010 when the average rate was 11.8 percent.

“In addition, 30 percent of 401k savers increased their contribution rate over the last 12 months, with Millennials leading the charge (36 percent increasing their contribution rate),” the Boston-based investment giant noted.

Fidelity’s analysis further revealed retirement savings account balances have increased overall, with the average 401k account balance now at $102,900 versus $95,500 this time last year.

Data show the average IRA and 403(b) account balances also rose, 8 percent and 9 percent respectively, from Q1 2017 to Q1 2018. However, the average balances in all of these savings vehicles fell slightly (approximately 1 percent) between the last quarter of 2017 and the first quarter of 2018.

“Despite some market volatility at the beginning of 2018, retirement savers stayed on track and continued to contribute to their IRAs and workplace savings plans,” Kevin Barry, president of workplace investing at Fidelity Investments, said in a statement.

Discouraging panic during short-term market downswings, Fidelity goes on to highlight the payoffs of saving consistently over time. Its analysis found:

“Especially during periods of market volatility, it’s important to take a long-term approach to retirement savings,” Barry added. “Making regular contributions over time is a key part of building your savings, especially a retirement nest egg.”

Exit mobile version