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Source: Fidelity
From Fidelity's press release on February 13, 2020:
- Average 401(k), IRA and 403(b) balances increased to record levels. The average 401(k) balance rose to $112,300, a new record high and a 7% increase from last quarter’s balance of $105,200. The year-over-year average balance increased 17% from $95,600 in Q4 2018; the average IRA balance also rose to a record $115,400, a 5% increase from last quarter and 17% higher than the $98,400 balance one year ago. The average 403(b)/tax exempt account balance increased to $93,100, up 6% from last quarter and an increase of 18% from Q4 2018.
- Employee 401(k) savings rates continue to increase. The average employee savings rate reached a record 8.9% in Q4, while the average total savings rate (employee contributions + company match) reached 13.5%, tying a record level last reached in Q2 of last year. Over the course of 2019, 33% of plan participants increased the amount they are saving, with the average increase just over 3%. Of the workers who increased their savings rates, 40% proactively took steps to do so on their own, while 60% had their savings rate automatically increased through a service within their employer’s retirement savings plan.
- A growing number of employers are automatically increasing employees’ contribution rate each year. The percentage of 401(k) plans automatically increasing the contribution rate for employees has more than doubled over the last 10 years, from 9% in Q4 2009 to 19% in Q4 2019. And while the limit for auto-increase contributions was capped at 10%, the SECURE Act will allow plans to auto-increase employee contributions up to 15%.
- Long-term savers saw balances increase to record levels in Q4. Among individuals who have been in their 401(k) plan for 10 years straight, the average balance reached a record $328,200, topping the previous high of $306,500 from last quarter. Among female investors, the average 10-year 401(k) balance grew to $261,000, an increase of 21% from a year ago and the first time the average balance for this group passed the quarter million-dollar mark. The average 401(k) balance for millennials who have been in their 401(k) plan for 10 years straight reached $149,800, another record high. Among individuals saving in 403(b)s (or other plans offered by not-for-profit employers) for 10 years straight, the average balance increased to $191,700, nearly five times the average balance for this group in Q4 2009.
- The number of 401(k) and IRA millionaires continued to grow, reaching record levels. The number of people with $1 million or more in their 401(k) increased to a record 233,000, up from 200,000 in Q3 and 21,000 in Q4 2009. The number of IRA millionaires increased to 208,000, also a record high and an increase from 182,400 last quarter.
For more information related to this press release please read:
- Why Fidelity 401(k) Millionaires Average $1.46 Mil Balances (Investor's Business Daily)
- There’s now a record number of 401(k) and IRA millionaires, according to Fidelity (CNBC)
If you want to stay informed on how much you can contribute stay informed with this information from Fidelity or visit the IRS website for information on retirement plans.
