Even amid the disruption of last year's "Great Resignation," participants in 401(k) plans set records for account balances and contribution increases, according to an analysis of 35 million IRA and plan accounts by Fidelity Investments.
Account balances in 401(k) plans were at a record $130,700, and young investors raised the total number of IRA accounts to a record 12.3 million, Fidelity said in a release.
Also last year, a record 38% of 401(k) participants increased their contributions, according to Fidelity.
“Despite facing a variety of financial hurdles in 2021, including ongoing market uncertainty and a shifting employment landscape, investors did not let the events derail their efforts and continued to stay focused on the key fundamentals of retirement savings,” Kevin Barry, president of workplace investing at Fidelity Investments, said in a statement.
Fidelity noted that the average balance in the 12.3 million individual retirement accounts it analyzed was $135,000, at the end of 2021, which was a slight decrease from the third quarter but a 6% increase from the fourth quarter of 2020.
The average 401(k) balance of $130,700 in the fourth quarter was up 4% from the third quarter and up 8% from a year ago. The average 403(b) account balance increased to a record $115,100, up 4% from the third quarter and 8% increase from the last quarter of 2020.
The highest level of growth in IRA accounts, Fidelity said, was among Gen Z investors — those born starting in the mid- to late-90s — where the number of accounts grew 146%, to almost 275,000.
The average IRA contribution was $4,300 in 2021, and 62% of IRA contributions went to Roth accounts.
The results of Tuesday’s election create tailwinds for the wealth management industry.
The next president has proposed cutting Social Security benefits taxes, which would deplete the system faster. Bipartisan support is needed to pass reforms, observers say.
Several panelists highlight actionable strategies and advice for RIAs ahead of RIA Activate California. Register today!
Wealth managers offer strategies for portfolio protection against the scourge of inflation.
The broker-dealer giant's latest additions in Florida, North Carolina and Georgia are starting anew at RayJay's independent advisor channel.
A great man died recently, but this did not make headlines. In fact, it barely even made the news. Maybe it’s because many have already mourned the departure of his greatest legacy: the 60/40 portfolio.
Discover the award-winning strategies behind Destiny Wealth Partners' client-centric approach.