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Fidelity Reveals Big Jumps in U.S. Retirement Savings

February 13, 2018

The average retirement savings account at Fidelity Investments has crossed the $100,000 mark, a new record, according to the company’s latest analysis of its 401(k) and individual retirement accounts.

The average savings in 401(k) accounts has reached $104,300, a 13% rise year-over-year, while the average IRA grew to $106,000, a 13% increase over the previous year, according to Fidelity’s analysis of 9.2 million IRA accounts and 15.3 million participants in corporate defined contribution plans, excluding the tax-exempt market, as of December 31, 2017. What’s more, close to a third of 401(k) savers increased their savings rate in the last quarter to 8.6%, up from 8.4% the year prior, Fidelity says. Average IRA contributions grew to $1,730 in the fourth quarter, compared to $1,590 the year prior, according to the report.

A higher savings rate combined with healthy stock market performance helped push up balances of long-term 401(k) savers in particular, Fidelity says. Those who’ve been contributing for 10 consecutive years saw their average balance grow to $286,700, up from $233,900 the year prior, while those who’ve been contributing for 15 years had their average balance reach $387,100, up from $318,500 the previous year, according to the report. The number of retirement savers whose accounts have reached that magic $1 million has also grown significantly: there were 150,000 401(k) accounts with $1 million or more in 2017, compared to 93,000 the previous year, and 152,000 IRA accounts with $1 million or more, compared to 109,000 at the end of 2016, Fidelity says.

Nonetheless, financial advisors may have an important role to play in helping clients reallocate portfolios to ensure they’re not overexposed to a possible market downturn. Fidelity found that 23.3% of its 401(k) savers were more than 10% over-invested in equities.

By Alex Padalka