By Marlene Satter
Employee retirement savings are on their way up, thanks largely to a rising stock market that has given 401(k) balances a 77 percent boost in one year. So says Fidelity’s second-quarter analysis of its 401(k) and IRA accounts.
Employees are putting more away, too, if only a little more, averaging $6,050 in annual contributions at the end of Q2. Employer contributions are a bit higher as well, at an annual average of $3,540, making for record balances. In fact, employees who have been active in a 401(k) retirement plan for a full 10 years have seen their average balance gain 15 percent per year during this past decade to reach $246,200.
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Looking at all employees together, from those who have just started a career all the way through to those getting ready to retire, quarterly average 401(k) balances are at a record high after rising 12.9 percent to $91,000. That’s up from $80,600 at the end of the first half of last year.
Fidelity IRAs did even better, and also saw record average account balances; they topped those record 401(k)s at $92,600. IRAs also beat 401(k)s in gains, rising 14.7 percent since the end of last year’s second quarter.
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Jim MacDonald, president, Workplace Investing, Fidelity Investments, said in a statement, “The recent record markets have resulted in increased retirement savings for millions of Americans. Now is a perfect time for people to seek guidance to ensure their savings and investment strategies can weather all market conditions.”
All these records are great for employees’ retirement accounts, but more can still be done. While the market contributed that 77 percent increase, employees saved only 7.08 percent more in their accounts than they did in Q2 of 2010, when contributions averaged $5,650. Employers did better, having added 15.31 percent more to employee accounts than in Q2 of 2010, when they averaged $3,070.
Should either — or both — bump up their contributions, the market could perhaps improve on its already impressive record.
Originally published on BenefitsPro.com