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Source: Fidelity
From Fidelity's press release published on November 12, 2020:
- Retirement accounts increase slightly in Q3. The average IRA balance was $117,700, a 6% increase from last quarter and 7% higher than the average balance of $110,200 a year ago. The average 401(k) balance increased to $109,600 in Q3, a 5% increase from Q2 and up from 4% from a year ago. The average 403(b) account balance increased to $96,100, an increase of 5% from last quarter and up 9% from a year ago.
- More individuals are saving in both an IRA and a 401(k). An increasing number of individuals are saving in an IRA in addition to their workplace savings plan. More than 2 million individuals on Fidelity’s platform save in both an IRA and their employer’s 401(k), an increase of 12.5% over Q3 2019. Among individuals saving in both their 401(k) and an IRA, the average combined balance rose to $333,700, an increase of 6% over the average balance of $312,000 a year ago. Millennials saving in both an IRA and a 401(k) saw their average balance increase 15.8% to $82,600.
- Workers continue to leverage CARES Act to help meet financial needs. The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, was signed into law in late March 2020 in response to the economic fallout from the COVID-19 pandemic. From March to the end of Q3, 1.2 million individuals had taken a CARES Act distribution from their retirement account, which represents 4.6% of eligible employees on Fidelity’s workplace savings platform. In Q3, the overall average withdrawal amount was $9,000, while the median withdrawal amount was $2,400. Since many employees who needed to tap their retirement saving opted for a CARES Act withdrawal, the percentage of workers initiating a traditional 401(k) loan dropped to 1.9% in Q3, with the overall percentage of 401(k) loans outstanding dropping to 18.7%.
For more Q3 2020 retirement trends read:
