Amid recent market fluctuations, there’s a silver lining for American retirees. Fidelity Investments reports that retirement account balances experienced a third consecutive quarter of growth in Q2 2023, defying market uncertainties.
Growth Metrics
The average IRA balance reached $113,800, showcasing a robust 5% increase from the previous quarter and an impressive 41% surge over the past decade. Simultaneously, the average 401(k) balance rose to $112,400, up 4% from the previous quarter and 39% higher than a decade ago. The average 403(b) balance also saw a notable uptick, reaching $102,400, a 5% increase from the last quarter and a remarkable 65% surge from a decade ago.
Positive Trends
Kevin Barry, President of Workplace Investing at Fidelity Investments, expresses satisfaction with the positive gains in retirement savings. As market conditions improve, both employees and employers are committed to fostering a secure financial future.
Wise Investment Strategies
Fidelity encourages Americans to maximize the benefits of employer matches and stay dedicated to retirement savings. With employer contributions factored in, the average retirement account savings rate for Q2 stood at 13.9%, closely aligning with Fidelity’s recommended contribution rate of 15%.
Gen X Challenges
However, challenges persist, particularly for Generation X. A Clever Real Estate survey reveals that 64% of Gen Xers ceased retirement savings due to financial constraints. Necessities like housing and credit card bills took precedence over saving for retirement. The National Institute on Retirement Security (NIRS) echoes these concerns, emphasizing the disparity in retirement savings between income quartiles within Gen X.
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