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Source: Fidelity
From Fidelity's press release on November 14, 2019:
- Average 401(k), IRA and 403(b) balances decreased slightly in Q3 2019. The average 401(k) balance dipped to $105,200, less than a 1% decrease from $106,000 in Q2 2019. The year-over-year average balance is down just over 1% from a record high balance of $106,500 in Q3 2018. The average IRA balance dropped slightly to $110,200, less than half a percentage point from last quarter and less than 1% lower than the $111,000 balance one year ago. The average 403(b)/tax exempt account balance dipped to $88,000, less than a 1% decrease from last quarter but up slightly from Q3 2018.
- More individuals are keeping all of their retirement savings in a target date fund. An increasing number of individuals are keeping all of their retirement savings in a target date fund, which can provide a diversified investment mix that can reduce the overall level of risk in their retirement account. Target date funds are often used as a default investment option for employers who automatically enroll employees in their workplace savings plan. As of Q3, 53% of 401(k) savers kept all of their savings in a target date fund, while 66% of workers saving in a 403(b)/tax exempt account kept all of their savings in a target date fund.
- Workers May Own Too Much Stock in Accounts, Exposing their Savings to Unnecessary Risk Although an increasing number of workers are leveraging target date funds to help keep their asset allocation on track and help manage the risk to their retirement savings, Fidelity’s Q3 analysis found that many 401(k) account holders had stock allocations higher than those recommended5 for their age group. Fidelity compared average asset allocations to an age-based target date fund and found nearly a quarter (23.1%) of 401(k) savers still have a higher percentage of equities than recommended, including 7% who are 100% equity. Among Baby Boomers, the over-allocation of stock was even higher – 37.6% have too much equity, including 7.9% who are in 100% equities. This is in addition to the 5% of Boomers who have zero exposure to equities in their 401(k).
- Number of workers contributing to a Roth 401(k) crosses the 1M mark. The number of workers contributing to a Roth 401(k) increased to 1.02 million in Q3, a nearly ten-fold increase from the 109,000 workers who contributed to a Roth 401(k) in Q3 2009. Nearly half (485,000) of the workers contributing to a Roth 401(k) are Millennials.
- Long-term savers saw balances increase to record levels in Q3. Among participants who have been in their 401(k) plan for 10 years straight, the average balance reached a record $306,500, topping the previous high of $306,000 from Q3 2018. Among workers saving in a 403(b)/tax exempt account, the 10-year continuous balance reached $179,000, more than four times the average balance for this group in Q3 2009.
- The number of 401(k) millionaires hits a fresh high (CNBC)
- Fidelity: OK, boomer, stop piling into risky stocks in case the market tanks (Markets Insider)
- 1 in 3 boomers makes this critical retirement mistake — far more than in other generations (MarketWatch)
- Fidelity to Baby Boomers: Lay Off the Stocks (Bloomberg)
