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Source: Fidelity
On August 21, 2019 Fidelity released its quarterly analysis of retirement savings trends, including account balances, contributions and savings behaviors, across more than 30 million retirement accounts. Average account balances continued to increase in the second quarter, reaching near-record levels after experiencing a dip at the end of 2018. Here are some findings from their press release:
- Average 401(k), IRA and 403(b) balances increased slightly in Q2 2019. The average 401(k) balance rose to $106,000, a 2% increase from $103,700 in Q1 2019. The year-over- year average balance is also up roughly 2% from $104,000 in Q2 2018. The average IRA balance increased to $110,400, a 2% increase from last quarter and 3% higher than the $106,900 balance one year ago. The average 403(b)/tax exempt account balance increased to $88,600, a 3% increase from last quarter and up 6% from Q2 2018.
- The number of 401(k) and IRA millionaires reached record levels. The number of people with $1 million or more in their 401(k) increased to a record 196,000, up from 180,000 at the end of Q1, while the number of IRA millionaires increased to 179,700, also a record high and an increase from 168,100 last quarter.
- Since the passage of the Pension Protection Act in 2006, the percentage of employers that automatically enroll new employees in the company’s 401(k) has increased to nearly 35%. And as the number of employers auto enrolling employees has grown, the default contribution rate for auto enrolled employees has also steadily increased – as of the end of Q2, more than one in five employers (20%) defaulted auto enrolled employees at a contribution rate of 6% or higher, more than three times the 6% of employers that defaulted employees at this rate as of Q2 2009. While a 3% default contribution rate is still the most popular among employers, the percentage of employers defaulting at this rate has dropped to 44%, down from more than 60% 10 years ago.
