US. Despite the pandemic, 401(k) balances and savings rates are higher than ever
Even with climbing Covid-19 case numbers and ever-increasing inflation, employed retirement savers have been socking away record amounts of cash in their retirement investment accounts.
Average 401(k) account balances and savings rates reached record highs in the second quarter of 2021, according to Fidelity Investments, the nation’s largest provider of 401(k) plans, marking three quarters of upward growth in a row.
Another positive sign for savers’ finances: The number of outstanding 401(k) loans also decreased.
At the start of the coronavirus pandemic, the average 401(k) balance dropped 19%, to $91,400, amid wild market volatility and uncertainty. But that number has since rebounded. The average 401(k) balance reached $129,300, up 24% from a year ago. Individual retirement account (IRA) balances also grew, reaching $134,900, on average.
The average savings rate for 401(k) contributors increased to 9.3%. Young workers seemed particularly confident about their finances: 54% of Gen Z savers with a retirement account increased how much they were contributing over the past year, as did 43% of millennials. Just 7% of workers have decreased their savings rate in the past 12 months.
Read more @CNBC
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