Fidelity Retirement Analysis: 401(k) Balances, Contributions and IRAs End 2016 at Record Levels

BOSTON--(BUSINESS WIRE)--Fidelity Investments^® today released its 401(k) and Individual Retirement Account (IRA) analysis¹ for the fourth quarter of 2016, which reveals:

• A record average 401(k) balance. Increasing contributions and stock market performance drove the average 401(k) balance to an all-time high of $92,500 at the end of Q4, topping the previous high of $92,100 in Q1 2015 and an increase of $4,300 from a year ago.

Average Balances
	Q4 2016	Q3 2016	One year ago	5 years ago
401(k)	$92,500	$90,800	$88,200	$69,400
IRA	$93,700	$94,100	$90,100	$69,400

• Number of IRA accounts top 8.5 million. Nearly one-half million IRA accounts were added in 2016 on Fidelity’s platform, which ended the year with more than 8.5 million accounts. The average IRA balance of $93,700 is up $3,600 year-over-year.
• Contribution rates rebound to pre-financial crisis levels. People re-focused on saving as the average contribution rate to Fidelity 401(k)s reached 8.4 percent in Q4, the highest level since Q2 2008. Over the past 12 months, the total savings amount (employee contributions plus employer match/profit sharing) reached a record $10,200.
• Percentage of 401(k) loans drops to lowest level in seven years. As contribution rates increase, the portion of Fidelity account holders with an outstanding 401(k) loan dropped to 21 percent, the lowest level since Q4 2009. For loan-takers, it’s important to continue 401(k) contributions during the life of the loan and consider increasing contributions once the loan is paid off.

“Key to a successful retirement strategy is having a solid contribution rate and not tapping your 401(k) for short-term expenses,” said Kevin Barry, president, Workplace Investing, Fidelity Investments. “More than one-in-four Fidelity 401(k) savers increased their savings rate in 2016 − an all-time high, and the number of people with a 401(k) loan dropped to its lowest point in seven years. This shows people are taking the right steps towards reaching their retirement savings goals and illustrates how the 401(k) is helping millions of people prepare for retirement.”

Targeted and online education leads to better engagement

The need for retirement savings information and education is increasing, and Fidelity is responding with content targeted to a person’s situation and life stage to help them understand their next steps. And it’s effective: over the past year, Fidelity’s messaging around enrollment, savings, investing and other topics has led to twice the level of engagement than standard messaging.

Web-based tools and online education are also proving effective, as more retirement savers are attending online seminars on how to set goals for retirement and increase their savings, and learn the importance of asset allocation, Social Security strategies and more. In the first half of 2016, attendance at live web sessions was up 52 percent and use of on-demand seminars, such as this session on how to prioritize savings goals, was up 62 percent. Fidelity’s interactive Money Check-up, which helps individuals understand their financial wellness and where they need to take action, has been completed by over 300,000 people since its launch last June. And Fidelity’s retail planning tools saw a 41 percent increase in traffic in 2016, with more than half of visitors creating, modifying or monitoring their retirement goals.

“These results show the value in continually innovating around how we educate people about retirement and their financial wellness,” continued Barry. “Fidelity has been recognized by Corporate Insight² for our online tools and education resources, which is another example of our commitment to providing the resources our customers need.”

About Fidelity Investments

Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $5.7 trillion, including managed assets of $2.1 trillion as of December 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 more than 12,500 financial advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for 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 www.fidelity.com/about.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Past performance is no guarantee of future results.

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

789476.1.0

© 2017 FMR LLC. All rights reserved.

¹ Analysis based on 22,100 corporate defined contribution plans and 14.5 million participants, as of December 31, 2016. These figures include the advisor-sold market, but exclude the tax-exempt market. Excluded from the behavioral statistics are non-qualified defined contribution plans and plans for Fidelity’s own employees. Fidelity’s IRA analysis based on 8.55 million IRA accounts.
² Corporate Insight “2016 Retirement Plan Monitor Awards.” Based on a comprehensive benchmark analysis in correlation with a survey of close to 1,500 DC plan participants, and published in December 2016.