The Jolliest Retirement Facts of 2024

While retirement statistics these days can be downright scary—from balancing inflation with emergency savings, healthcare expenses, and the thought of a looming Social Security insolvency—workers and plan advisors are making changes to accommodate a comfortable retirement.

While they continue to face financial obstacles, more workers are optimistic about their retirement savings goals. A Schwab 2024 401(k) Participant Survey released earlier this year found that even as they think they’ll need $1.8 million in retirement, 43% of participants believe they are “very likely” to hit this goal compared to 37% in 2023. This is as more educate themselves about 401(k) investments and market factors when planning for retirement.

“Workers are feeling more optimistic about their retirement prospects and an improving economic climate tends to boost financial confidence, but it’s not the only factor,” said Lee McAdoo, managing director of Schwab Retirement Plan Services at the time. “We’re seeing heightened awareness around 401(k) investments and performance—a promising sign that workers are actively engaging with their accounts and cultivating knowledge to help them reach their goals.”

Read on to learn more about the leading jolliest facts spreading holiday cheer in the retirement industry for 2024.

Appetite for Advice

The same Schwab 401(k) study found that workers’ appetite for financial advice has increased in the last year.

According to the study, 61% say their financial situation warrants advice from a professional, higher than last year (55%). Plus, more workers would be very confident in making the right 401(k) investment decisions with the help of a financial professional (55%, up from 49%), than they would making those decisions on their own (29%, up from 27%).

Workers are most likely to say they seek advice directly through their 401(k) plan (39%), followed closely by their financial advisor (35%), family and friends (27%), and their employer (25%). Sixty-one percent are comfortable asking artificial intelligence tools like ChatGPT for help with financial planning, up from 49% in 2023. Still, more say they are very likely to follow human professional advice recommendations (60%) rather than computer-generated recommendations (19%).

“Improved 401(k) confidence is not necessarily an indicator that workers are comfortable going it alone,” said Marci Stewart, director of Client Experience at Schwab Workplace Financial Services. “In fact, they are realizing that professional help has the potential to further accelerate their progress.”

Retirement Account Balances Grow

Fidelity Investments’ Q3 2024 Retirement Analysis shows that the average balances for more than 49 million 401(k), 403(b) and IRA retirement accounts increased by 18% to 23% over the past year.

The average 401(k) balance at Fidelity grew from $127,100 in Q2 2024 to $132,300 as of Q3 2024. That’s up 23% from Q3 2023 and 48% from Q3 2014. For comparison, in November Bank of America reported that average 401(k) account balances at the end of Q3 2024 was $102,660. The record 401(k) balance in Q3 surpassed the previous record high of $130,700 in Q4 2021.

The average balance for all individuals who have been saving in their 401(k) for 15 years continuously with Fidelity grew to $558,300 ($586,100 among Gen X savers). Among Gen Z workers who have been saving for five years continuously, the average balance reached $51,800.

The percentage of employers that are offering a Roth option and managed accounts within their 401(k) continues to increase, and 1 in 5 (20.7%) plans automatically increases the employee contribution rate for workers who are auto enrolled in their plan.

403(b) balances at Fidelity jumped from $114,700 to $119,300, also up 23% from a year ago and up 68% from 10 years ago. The record 403(b) balance in Q3 surpassed the previous record of $115,100 from Q4 2021.

Average IRA balances, on the other hand, remained at $129,200—same as Q3 2024 and up 18% from a year ago (and 41% from 10 years ago).

Black, Hispanic, Latina Women Grow Generational Wealth

A higher number of Black, Hispanic, and Latina women are incorporating investing strategies to grow wealth, shows findings from J.P. Morgan Wealth Management’s Diverse Investor Study.

The study found that 51% of Hispanic and Latina women respondents and 46% of Black women respondents began investing outside of an employer-sponsored retirement plan less than five years ago, compared to 24% of all respondents. Seventy-four percent of Hispanic and Latina women and 69% of Black women credited building generational wealth as their motivation to start investing.

Black women were also likelier to show their support for women-led investments. According to findings, 59% of Black women investors said it’s important that the companies their investing in be women-owned—twice as high as investors surveyed overall (28%).

The findings show that more than half of younger investors in these groups would rather take an active role in selecting stocks, bonds, or index funds that comprise their portfolio, compared to 45% of Black Gen Xers and Baby Boomers, 46% of Hispanic and Latino Gen Xers, and 37% of Hispanic and Latino Boomers.

“Consistently women, and in particular diverse women, are motivated to build wealth to create more opportunities for their children and families,” said Kristin Lemkau, CEO of J.P. Morgan Wealth Management. “They understand in a time of changing markets that saving isn’t enough. They also need to invest to have their money make money.”

Advisors Foster Unified Client Relationships

A greater number of financial advisors are prioritizing building collaborative client relationships, finds research by the Financial Planning Association and Allianz Life.

The findings, which fielded responses from 387 financial planners, found that 74% of advisors are investing additional time in managing client relationships, while 67% are shifting their business models to work with more clients who see their relationship as a unified partnership.

The research shows that advisors are aspiring to be more client-centered—88% want to learn more about their clients’ values and beliefs to incorporate them into financial plans, while 76% are broadening their approach to incorporate a wider range of client needs.

Gen Z Prioritize Savings and Financial Literacy

Gen Z workers say they take a “forward-looking approach” to money and savings, notes research from The Standard.

According to the findings, 79% of Gen Zers describe saving as their top goal, while 80% say they value working for an employer who provides support for financial literacy.

Furthermore, previous research shows this age group is looking for employers to provide traditional benefits like retirement plans and life insurance, as well as financial coaching. 

“Gen Z employees want transparency. They need help when it comes to their future, enrolling in benefits and knowing what their options are,” said one Millennial-aged manager at a healthcare company with over 2,500 employees, who was surveyed by The Standard.

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