According to the Fidelity Investments® Q2 2024 retirement analysis, retirement savers experienced the third quarter in a row of growth. While smaller than the previous two quarters, the growth is a continuation of the strong contribution levels and positive market conditions that have driven average account balances to the third-highest average on record. Additionally, Gen X made strong gains with their retirement savings, with current IRA contributions the highest observed in the last five years.
Average retirement account balances
Positive gains for retirement savers
14.2%
total average 401(k) savings rates
Total average 401(k) savings rates remained consistent this quarter at 14.2%, driven by employee and employer 401(k) contributions remaining at last quarter’s 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).
$554,000
average balance for 15-year savers
The average balance for 5, 10 and 15 year continuous savers increased again this quarter, demonstrating the value of consistently contributing in the same plan for an extended period of time. In fact, 15-year Gen X⁴ savers continue to see their savings increase, with an average balance this quarter of $554,000 (compared to $543,400 last quarter) – a promising sign as this generation approaches their retirement years.
30%
increase in total IRA contributions
Gen X had a 30% increase in total IRA contributions over the last year, with current contributions the highest they’ve been in the last five years.
2.5%
increase in 401(k)-created millionaires
6%
increase in IRA-created millionaires
This quarter saw another all-time high in retirement-created millionaires, with 401(k)-created millionaires increasing by 2.5% (497,000) from Q1 (485,000) and IRA-created millionaires increasing by 6% (398,594 vs. 376,275). These individuals were able to reach this level of retirement savings by starting early and contributing consistently over many years.
“Although increases were modest, retirement savers in the second quarter of 2024 benefited from the continued upswing of the previous quarter, when contribution levels and average account balances reached record highs. Through market ups and downs, we always stress the importance of making steady retirement contributions. This quarter, Americans leveraged positive market conditions to build upon their savings and further secure their financial future.”
Sharon Brovelli,
President of Workplace Investing at Fidelity Investments
Spotlight: Non-profits and retirement
Fidelity’s biannual study of its 2,500 nonprofit retirement plans, Better Outcomes for Nonprofit Organizations, places a spotlight on the savings behaviors, engagement and retirement readiness of savers working within the nonprofit industry (e.g., hospitals, universities, etc.). The latest report reveals retirement readiness measures for nonprofit employees have steadily increased over the last ten years, including:
Participation rates
Up 10%
Up from 72% to 82%
Savings rates
Up 2.7%
Up from 8.5% to 11.2%
Age-appropriate allocation
Up 16%
Up from 68% to 84%
Retirement plan engagement
Up 17%
Up from 55% to 72%
Average account balances
$249,000
3x increase from $70,000
Participants
223,000
4x increase from 52,000
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* Unless otherwise noted, data within is based on Fidelity's analysis of savings behaviors and account balances for more than 48 million IRA, 401(k), and 403(b) retirement accounts.
¹ Fidelity business analysis of 15.8 million IRA accounts as of June 30, 2024. Considers only active participants with balance.
² Fidelity Investments Q2 2024 401(k) data based on 26,000 corporate defined contribution plans and 24 million accounts as of June 30, 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 Q2 2024 403(b) data based on 10,010 Tax-exempt plans and 8.6 million plan participants as of June 30, 2024. Considers average balance across all active plans for 6.37 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.
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