American workers are making progress with their retirement savings, with the next generation to retire en masse making impressive progress.
A new report from Fidelity Investments found that, across generations, retirement savings accounts saw positive gains from contributions and market conditions in the third quarter of 2024, with 401(k) and 403(b) balances reaching record highs.
Sharon Brovelli, president of Workplace Investing at Fidelity Investments, says that contributions to retirement savings accounts have held steady or increased.
“This is meaningful as retirement savers prepare to close out 2024 and establish new budgets and financial goals for the coming year,” said Brovelli. “Consistent retirement contributions during various market cycles is important, but despite what happens in the market, maintaining this commitment in the long run is what will help set Americans up for a future of financial wellness and security.”
There was a 9.5% annual increase in 401(k)-created millionaires in Q3 2024 to 544,000, while IRA-created millionaires reached 418,111, a 5% increase from the same period of 2023.
Gen Xers have boosted the number of IRA accounts receiving contributions (up 23% year-over-year) and increases in IRA contributions (up 35% year-over-year)
“We are pleased to see Gen-X retirement savers continue to make solid gains with their retirement savings,” added Roger Stiles, president of Fidelity Wealth. “The oldest individuals of this generation will be approaching retirement in the next five to ten years, making this the perfect time to focus on securing a nest egg that can help them live more comfortably throughout their retirement years.”
The report also looked at the adoption of auto portability of workplace retirement savings accounts, designed to address the prevalence of savers cashing out their accounts when changing jobs (around 41% are reported to do this).
As of October 2024, more than 6,000 Fidelity plans adopted auto portability, with 2.2 million active participants in the Fidelity network.
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