BOSTON--(BUSINESS WIRE)--Fidelity Investments® today released its quarterly analysis of its 401(k) and Individual Retirement accounts, along with its annual analysis of small business retirement plans. The analysis1 reveals:
- Account balances lower in Q1. The average 401(k) balance dipped slightly at the end of Q1 and is down roughly five percent from the record high balance at the end of Q1 2015. The average IRA balance also decreased at the end of Q1, and is also down five percent from one year ago.
|
Average Balances |
|||||||||
| Q1 2016 | Q4 2015 | Q1 2015 | |||||||
| 401(k) | $87,300 | $87,900 | $91,800 | ||||||
| IRA | $89,300 | $90,100 | $94,100 | ||||||
- Long-term savers see account balances increase in Q1. The average balance for people who have been in their 401(k) continuously for 10 years increased 2 percent year-over-year to $240,700. For long-term savers between the ages of 35-39 – when, according to Fidelity, individuals should aim to have saved2 between two to three times their salary in retirement savings – the average balance was $131,000 at the end of Q1.
- More individuals are saving in both an IRA and a 401(k). As more retirement savers recognize the benefits of IRAs and 401(k) accounts, the number of people in both an IRA and a 401(k) at Fidelity increased 7 percent in 2015 to almost 1.3 million individuals. While the average combined IRA/401(k) balance declined 2 percent year-over-year from $267,200 to $260,900, the average combined contribution amount3 increased 3 percent from $11,300 to $11,600.
- Total savings rate for 401(k) savers hits record level. The total savings rate for 401(k) savers, which combines individual contributions plus employer contributions (such as a company match and profit sharing), reached a record 12.7 percent in Q1, topping the previous record high of 12.5 percent in Q1 2008. In addition, a record 13.6 percent of 401(k) investors increased their savings rate in Q1, an increase from the previous high of 12.9 percent in Q1 of 2015.
“Investors were once again exposed to market volatility in the first quarter of this year, but an increasing number of people remained steadfast when it came to savings,” said Doug Fisher, senior vice president, Workplace Investing, Fidelity Investments. “In order to reach their goals, retirement investors should resist reacting to short-term market events and maintain a consistent savings rate and diversified asset allocation during both market upswings and downturns.”
Contributions to Small Business Retirement Plans Increase in 2015
For
insight on retirement savings trends among the country’s small business
retirement plans, Fidelity conducts a yearly analysis of trends
and behaviors for self-employed 401(k) accounts, self-employed (SEP)
IRAs and Savings Incentive Match Plan for Employees (SIMPLE) IRAs. While
the average account balance for small business retirement plans was
lower in 2015, contributions3 increased in every plan
category.
- The average balance for self-employed 401(k) plans at the end of 2015 was $140,800, a 2 percent decrease from 2014. The average contribution increased to $23,300 in 2015, a 4 percent increase from 2014. The number of people contributing to a self-employed 401(k) plan increased 1 percent in 2015.
- For SEP IRAs, the average balance at the end of 2015 was $88,800, a 1 percent decrease from 2014. Average contribution increased 2 percent to $14,300 in 2015 and the number of contributors increased 4 percent.
- The average balance for SIMPLE IRAs at the end of 2015 was $36,400, a 4 percent decrease from 2014. The average contribution for 2015 was $6,380, a 2 percent increase from 2014. The number of people contributing to a SIMPLE IRA in 2015 increased 4 percent.
“Fidelity manages hundreds of thousands of retirement plans for companies of all sizes, from Fortune 500 corporations to individuals who are starting their own business,” continued Fisher. “The common thread among all of our clients is the important role workplace retirement plans play in delivering financial wellness for employees. As the industry’s leading provider of retirement savings plans, Fidelity is committed to providing the tools, guidance and expertise to help employers of all sizes with their retirement plan needs.”
About Fidelity Investments
Fidelity’s
goal is to make financial expertise broadly accessible and effective in
helping people live the lives they want. With assets under
administration of $5.2 trillion, including managed assets of $2.0
trillion as of March 31, 2016, we focus on meeting the unique needs of a
diverse set of customers: helping more than 25 million people invest
their own life savings, nearly 20,000 businesses manage employee benefit
programs, as well as providing nearly 10,000 advisory firms with
investment and technology solutions to invest their own clients’ money.
Privately held for nearly 70 years, Fidelity employs 45,000 associates
who are focused on the long-term success of our customers. For more
information about Fidelity Investments, visit https://www.fidelity.com/about.
Diversification/asset allocation does not ensure a profit or guarantee against loss.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Fidelity Brokerage Services LLC, Member NYSE, SIPC
900
Salem Street, Smithfield, RI 02917
Fidelity Investments Institutional Services Company, Inc.
500
Salem St., Smithfield, RI 02917
760183.1.0
© 2016 FMR LLC. All rights reserved.
1 Analysis based on 21,800 corporate defined contribution
plans and 13.9 million participants, as of March 31, 2016. These figures
include the advisor-sold market, but exclude the tax-exempt market. Also
excluded are non-qualified defined contribution plans and plans for
Fidelity’s own employees. Fidelity’s IRA analysis based on 6 million IRA
customers.
2 Fidelity Viewpoint: “How Much Do I Need to
Save for Retirement?” March 16, 2016
3 Contribution data
for combined 401(k) and IRA accounts, as well as contributions for solo
401(k) plans, SEP IRAs and SIMPLE IRAs, include both employee and
employer contribution.
