Average retirement balances hit record in Q1: Fidelity

Year-over-year values are up more than 30% across more than 30 million IRAs, 401(k) and 403(b) accounts.

Average balances across more than 30 million IRA, 401(k), and 403(b) retirement accounts held at Fidelity reached record levels in the first quarter, the company said.

The stock market’s positive performance and a seasonal increase in contributions to individual retirement accounts were behind the records, Fidelity said, along with lower loans and withdrawals.

The average individual retirement account balance was $130,000, which was up 1% from the level at the end of the fourth quarter and up 31% from the first quarter of 2020, according to Fidelity.

The average 401(k) balance rose to $123,900, a 2% increase from the fourth quarter and up 36% from a year ago.

The average 403(b) account balance reached a record $107,300, up 1% from the fourth quarter and 42% higher than in the first quarter of 2020.

Total IRA contributions grew to $4.3 billion during the first quarter, nearly double the $2.9 billion in contributions from a year earlier, the company said. In addition, 26% of overall IRA contributions were made by investors under the age of 35, up from 23% in the first quarter of 2020.

The portion of contributions going to Roth IRAs continues to increase, rising to 60% of all IRA contributions in the first quarter.

Although many workers continued to face financial challenges related to the pandemic, the percentage of workers with outstanding 401(k) loans dropped to 17.5%, down from 19.7% in the first quarter of 2020.

Only 1.6% of 401(k) savers initiated a new loan in the first quarter, which was flat from the fourth quarter and down from 2.4% in the first quarter of 2020.

The percentage of workers who made a withdrawal from their 401(k)s, including hardship withdrawals, dropped to 2.4% in the first quarter, down from 6.1% in the fourth quarter and 3.0% in the year-ago quarter.

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