Retirement savers finished 2023 on a high note, Fidelity says
In a year marked by resilient economic growth and a notable uptick in consumer confidence, the U.S. saw substantial positive shifts in retirement savings plans. That’s according to the latest retirement data from Fidelity, which showed more than a third (37 percent) of American workers took proactive steps towards their financial future by increasing their retirement savings contribution rates in 2023.
That surge in savings activity occurred as US payrolls rose by 2.7 million and consumer confidence rebounded. At the same time, employers kicked in an average of $4,600 to their workers’ retirement accounts, helping lay a strong foundation for their future financial well-being.
The participation rate in employer-sponsored retirement plans remained high, according to Fidelity’s retirement report, with 73 percent of eligible employees contributing to their workplace savings plan in 2023.
Average 401(k) balances saw a significant rise of 14.1 percent over the year, reaching $118,600 in the fourth quarter. That was mirrored in the 403(b) space, where average balances climbed to $106,100 on the back of a 14.5 percent increase.
The data also showed increasing adoption of auto-enrollment policies among employers, with more than a third of 401(k) plans setting the initial contribution rate at 5% or higher. Building off that behavioral nudge, four-fifths of savers (78%) are now contributing at a rate sufficient to capture the full employer match, maximizing their savings potential.
The report highlighted a growing trend towards flexible retirement savings, with 94 percent of plans offering Roth options by Q4 2023, a significant increase over the past five years.
Among Gen X workers who have consistently contributed to their 401(k)
Read more on investmentnews.com
