Fidelity® Q1 2019 Retirement Analysis: Account Balances Rebound from Dip in Q4, While Savings Rates Hit Record Levels

Staying the Course Results in Significant Increases in Retirement
Balances on 10-Year Anniversary of Stock Market Low¹

BOSTON–(BUSINESS WIRE)–Fidelity
Investments^®, a broadly diversified financial
services company with more than $7.4 trillion in client assets, today
released its quarterly analysis of retirement savings trends, including
account balances, contributions and savings behaviors, across more than
30 million retirement accounts. Average account balances rebounded in
the first quarter after a slight dip at the end of 2018, buoyed by
positive stock market performance as well as record contribution levels
to retirement accounts.

Highlights from Fidelity’s Q1 2019 analysis include:

• Average 401(k), IRA and 403(b) balances rebounded in Q1 2019.
  The average 401(k) balance rose to $103,700, an 8% increase from
  $95,600 in Q4 2018. The year-over-year average balance is up roughly
  1% from $102,900 in Q1 2018. The average IRA balance increased to
  $107,100, a 9% increase from last quarter and 2% higher than the
  $105,100 balance one year ago. The average 403(b) account balance
  increased to $85,800, also a 9% increase from last quarter and up 2%
  from Q1 2018.

• The number of 401(k) and IRA millionaires increased. The number
  of people with $1 million or more in their 401(k) increased to
  180,000, up from 133,800 at the end of Q4, while the number of IRA
  millionaires increased to 168,100, up from 138,800 last quarter.
• Combined average balances for individuals saving in both an IRA and
  a workplace savings plan increased to more than $300,000. The
  combined average balances for savers with both a workplace retirement
  plan, such as a 401(k) or 403(b), and an IRA reached $307,600, a
  record high and an increase of 9% from the combined average balances
  of $281,000 at the end of 2018.
• Employee and employer contributions to retirement accounts hit
  record levels in Q1. The average 401(k) employee contribution
  amount, in dollars, reached a record level of $2,370 in Q1, a 15%
  increase over one year earlier. In addition, the average 401(k)
  employer contribution, or company match, reached $1,780 in Q1, a
  record high and a 6%increase from one year earlier. The average 401(k)
  employer contribution rate, in terms of percentage of salary, reached
  4.7% in Q1, which was also a record high and boosted the average total
  savings rate (employee contributions + company match) to an all-time
  high of 13.5% in the first quarter. In addition, contributions to
  403(b)/tax exempt retirement accounts also increased to record levels,
  with the average employee contribution amount reaching $1,700 in Q1,
  while the average employer contribution increased to $1,430.
• The number of 403(b) accounts reached record levels. The number
  of individuals with a 403(b) account at Fidelity increased to 6.1
  million at the end of Q1, an increase of nearly half a million
  (456,000) accounts over the past year and a 43% increase over the past
  five years.

“One of the most important aspects of a retirement savings strategy is
making sure you’re contributing enough to reach your goals,” said Kevin
Barry, president of Workplace Investing at Fidelity Investments.
“While the growth of account balances is due to a combination of market
performance and savings, both are critical to reaching long term
retirement savings goals. Fidelity recommends saving
at least 15% of your income for retirement and it’s encouraging to
see that, on average, people are saving more for retirement.”

10-Year Analysis Shows Significant Growth in 401(k) Accounts, More
Balanced Allocation

In light of the 10-year anniversary of the stock market reaching
all-time lows during the financial downturn, Fidelity examined the
accounts of 1.64 million individuals who have had the same 401(k)
account since Q1 2009, and compared their current 401(k) account balance
with their average balance 10 years ago. The following chart outlines
the overall increase in balances for this group, along with specific
analysis for millennials, Gen Xers and boomers⁵ within the
overall population of 10-year continuous savers:

* Average balances in this analysis include 1.64 million accounts
that have been continuously invested in the same 401(k) plan over the
past 10 years. Past performance is no guarantee of future results.

Fidelity’s 10-year analysis also highlighted how the average asset
allocation within 401(k) accounts has gradually shifted to become more
diversified, which can be partially attributed to the increasing use of
target date funds among 401(k) savers. As of Q1 2019, 52% of individuals
had all of their 401(k) savings in a target date fund, compared with
just 16% in Q1 2009. In addition, a much lower percentage of individuals
had all of their 401(k) savings in stocks — only 7% of individuals had
an all-stock 401(k), compared with 15% who had an all-stock 401(k)
allocation in Q1 2009.

For more information on Fidelity’s Q1 2019 analysis, please click here
to access Fidelity’s “Building Futures” overview, which provides
additional details and insight on retirement trends and data.

About Fidelity Investments
Fidelity’s
mission is to inspire better futures and deliver better outcomes for the
customers and businesses we serve. With assets under administration of
$7.4 trillion, including managed assets of $2.7 trillion as of March 31,
2019, we focus on meeting the unique needs of a diverse set of
customers: helping more than 30 million people invest their own life
savings, 22,000 businesses manage employee benefit programs, as well as
providing more than 13,500 financial advisory firms with investment and
technology solutions to invest their own clients’ money. Privately held
for more than 70 years, Fidelity employs more than 40,000 associates who
are focused on the long-term success of our customers. For more
information about Fidelity Investments, visit https://www.fidelity.com/about.

Keep in mind that investing involves risk. The value of your
investment will fluctuate over time, and you may gain or lose money.

Target Date Funds are an asset mix of stocks, bonds and other
investments that automatically becomes more conservative as the fund
approaches its target retirement date and beyond. Principal invested is
not guaranteed.

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem
Street, Smithfield, RI 02917

Fidelity Investments Institutional Services Company, Inc.,
500
Salem Street, Smithfield, RI 02917

National Financial Services LLC, Member NYSE, SIPC,
200 Seaport
Boulevard, Boston, MA 02110

885472.1.0

© 2019 FMR LLC. All rights reserved.

¹ Dow Jones Industrial Average dropped to 6,443 on March 6,
2009, the lowest level recorded during the financial crisis of 2007-2008.
²
Analysis based on 22,800 corporate defined contribution plans and 16.9
million participants as of March 31, 2019. 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 IRA
analysis based on 9.7 million Personal Investing IRA accounts, as of
March 31, 2019 and includes all IRAs except for small business IRAs and
IRAs distributed through the advisor-sold market.
⁴
Analysis based on 10,600 defined contribution plans, including 403(b),
401(a), 401(k) and 457(b) qualified plans, and 6.1 million participant
accounts, for 4.6 million unique individuals, in the tax-exempt market,
as of March 31, 2019.
⁵ Generational start/end dates
were chosen to align with Pew Research. Boomers (born 1946 – 1964), Gen
X (born 1965 – 1980), and Millennials (born 1981 – 1997).

Contacts

Corporate Communications
(617) 563-5800
[email protected]

Mike
Shamrell
(617) 563-1996
[email protected]