Tuesday, August 8, 2017

Retirement Data: Fidelity Plan Balances Q2 2017

Source: Fidelity Press Release Aug 3, 2017

From the Fidelity release: "The average 401(k) account balance triples for long-term savers. People in their 401(k) for 10 years straight saw their balance increase to a record average of $266,100, up from $78,800 in Q2 2007.

The ten year growth is attributed to 53 percent market action and 47 percent employee contributions, which shows the benefit of saving and investing with a long-term view. Analysis based on 22,200 corporate defined contribution plans and 15 million participants, as of June 30, 2017. These figures include the advisor-sold market, but exclude the tax-exempt market. Excluded from the behavioral statistics are non-qualified defined contribution plans and plans for Fidelity’s own employees. Fidelity’s IRA analysis based on 8.78 million IRA accounts. Small business data based on 687,000 small business retirement accounts." Please read the press release for more information.

In addition Susan Woolley wrote a fantastic article for Bloomberg on this topic titled: Americans Keep Crushing It With Their 401(k)s: The stock market is fueling all-time highs in retirement account balances, with the average IRA breaking into the six figures. She writes, "Employees put a record average of $5,850 into their 401(k)s over the past 12 months, a 4 percent increase from a year ago. Ninety-five percent of active employees contribute to their 401(k)s, and many defer enough of their pre-tax salary to get the average company match, which is 4.5 percent. But about 21 percent of employees can’t, or aren’t, contributing enough to get the full match. Many are likely to have been auto-enrolled into their 401(k) at a salary deferral rate of 3 percent, and left it there."

She goes on to write: "One way companies are trying to get employees to save more is by rejiggering the company match, said Jeanne Thompson, a senior vice president at Fidelity. For example, instead of giving a 100 percent match on the first three percent of salary put into the plan, a company may match 50 percent of contributions up to 6 percent, so employees need to contribute 6 percent to get the full match."

Please consult a qualified financial advisor before making any investment decisions. This blog is for educational purposes only and does NOT constitute individual investment advice.

No comments:

Post a Comment