According to the latest retirement data from Fidelity Investments® Q1 2024 retirement analysis, record-high contribution levels coupled with positive market conditions pushed average account balances to their highest levels since the fourth quarter of 2021. Long-term savers observed the greatest improvement, which is good news, especially for the more than 4.9 million workers that have been in their 401(k) plan for five years or more.
Average retirement account balances
Positive gains for retirement savers
14.2%
average 401(k) savings rates
Total average 401(k) savings rates reached a record high of 14.2%, driven by employee and employer 401(k) contributions that matched previous record levels (9.4% and 4.8%, respectively). This savings rate is the closest it has ever been to Fidelity's suggested savings rate of 15% (this includes employee and employer contributions).
7%
increase in account balances for 15-year savers
The average balance for 5, 10 and 15 year continuous savers increased this quarter, with 15-year savers seeing a 7% increase in their account balances, demonstrating the value of consistently contributing in the same plan for an extended period of time. Additionally, for the first time, the 15-year continuous balance for Gen X⁴ participants ($543,400) surpassed the 15-year continuous balance for Boomers⁴ ($543,200).
71%
increase in number of accounts
The number of Gen Z Roth IRA accounts increased 71% in Q1 2024 compared to Q1 2023, with average contributions increasing by 11.1%. IRA accounts owned by female Gen Z-ers increased by 60% over the last year.
17.8%
with an outstanding loan
The percentage of workers with a loan outstanding remained at 17.8% this quarter, consistent with Q4 2023 levels, but higher than a year ago (16.7%).
“We are encouraged to see account balances increase, providing solid proof that retirement savers are remaining invested and continuing to make steady contributions – while seeing the financial benefits as a result. With continued participation across generations and income levels, retirement savers will continue to build better financial futures, which is essential to the financial health of so many Americans and our economy.”
Sharon Brovelli,
President of Workplace Investing at Fidelity Investments
Spotlight: Small business month
In honor of Small Business Month, we are highlighting the strong savings behaviors of our small business retirement savers – showing the value of having access to a retirement savings account. While research shows only 30% of small businesses offer a retirement savings benefit, Fidelity’s small business data – representing SEP and SIMPLE IRAs and Self-Employed 401(k)s – shows that when a small business employee is given the opportunity to save, they run with it.
Average account balance
$152,000
Average contribution rate
8%
Compared to a 9.3% deferral rate for a traditional 401(k)
Average tenure
9.9 years
Compared to 8.6 years for a traditional 401(K)
Additionally, Fidelity Advantage 401(k)℠ – our simple, low-cost plan designed for employers offering a 401(k) for the first time – represents an emerging area of opportunity and is better helping to meet the needs of many small businesses. Fidelity has seen substantial growth since launching the offering in 2021.
Growth in total assets
Up 417.5%
Year-over-year 2022 to 2023
Small business enrolled since 2021
761
Eligible employees
170,000
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* Unless otherwise noted, data within is based on Fidelity's analysis of savings behaviors and account balances for more than 45 million IRA, 401(k), and 403(b) retirement accounts.
¹ Fidelity business analysis of 15.3 million IRA accounts as of March 31, 2024. Considers only active participants with balance.
² Fidelity Investments Q1 2024 401(k) data based on 25,800 corporate defined contribution plans and 23.9 million participants as of March 31, 2024. 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.
³ Fidelity Investments Q1 2024 403(b) data based on 10,055 Tax-exempt plans and 8.6 million plan participants as of March 31, 2024. Considers average balance across all active plans for 6.33 million unique individuals employed in tax-exempt market.
⁴ Generations as defined by Pew Research: Baby Boomers are individuals born between 1946-1964, Gen X are individuals born between 1965-1980, Millennials include individuals born between 1981-1996 and Gen Z includes individuals born between 1997-2012.
Keep in mind that investing involves risk, including the risk of loss. The value of your investment will fluctuate over time, and you may gain or lose money.
Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.
Past performance is no guarantee of future results.
Diversification/asset allocation does not ensure a profit or guarantee against loss.
As with all your investments through Fidelity, you must make your own determination whether an investment in any particular security or securities is consistent with your investment objectives, risk tolerance, financial situation, and evaluation of the security. Fidelity is not recommending or endorsing investments by making them available to its customers.
Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk.
Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.
Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market, or economic developments, all of which are magnified in emerging markets. These risks are particularly significant for investments that focus on a single country or region.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Because of their narrow focus, sector funds tend to be more volatile than funds that diversify across many sectors and companies.
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