Retirement savings account balances hit two-year high: Fidelity

investmentnews.com:

Retirement account balances have reached their highest levels in over two years, driven by record-high contributions and favorable market conditions, according to Fidelity Investments’ first-quarter 2024 retirement analysis.

Based on an analysis of more than 45 million IRA, 401(k), and 403(b) retirement accounts on its platform, the investment giant highlights that long-term savers showed the greatest improvement in their account balances.

“Average account balances [in 401(k) and 403(b) accounts] increased more than 5% from last quarter and reached their highest levels since Q4 2021,” Fidelity said in its latest Building Financial Futures report.

The average 401(k) account held $125,900, exceeding the $113,000 for the average 403(b) account, the report said.

“We are encouraged to see account balances increase, providing solid proof that retirement savers are remaining invested and continuing to make steady contributions – while seeing the financial benefits as a result,” Sharon Brovelli, president of workplace investing at Fidelity Investments, said in a statement.

Savings rates in 401(k)s hit a record high of 14.2 percent as contributions from employees and employers matched the highs seen in previous quarters. Younger savers also played a substantial role, Fidelity said, as their 401(k) accounts saw balance increases of 11 percent for millennial and 15 percent for Gen Z savers.

Focusing on data around 15-year continuous 401(k) savings balances, Fidelity found Gen X participants edged out Boomers for the first time, with Gen Xers amassing $543,400 compared to $543,200 for Baby Boomer investors.

As of the first quarter of 2024, over 4.9 million workers have been investing in their 401(k) plans for at least five years,