Even amid the disruption of last year’s “Great Resignation,” participants in 401(k) plans set records for account balances and contribution increases, according to an analysis of 35 million IRA and plan accounts by Fidelity Investments.
Account balances in 401(k) plans were at a record $130,700, and young investors raised the total number of IRA accounts to a record 12.3 million, Fidelity said in a release.
Also last year, a record 38% of 401(k) participants increased their contributions, according to Fidelity.
Despite facing a variety of financial hurdles in 2021, including ongoing market uncertainty and a shifting employment landscape, investors did not let the events derail their efforts and continued to stay focused on the key fundamentals of retirement savings, Kevin Barry, president of workplace investing at Fidelity Investments, said in a statement.
Fidelity noted that the average balance in the 12.3 million individual retirement accounts it analyzed was $135,000, at the end of 2021, which was a slight decrease from the third quarter but a 6% increase from the fourth quarter of 2020.
The average 401(k) balance of $130,700 in the fourth quarter was up 4% from the third quarter and up 8% from a year ago. The average 403(b) account balance increased to a record $115,100, up 4% from the third quarter and 8% increase from the last quarter of 2020.
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The highest level of growth in IRA accounts, Fidelity said, was among Gen Z investors those born starting in the mid- to late-90s where the number of accounts grew 146%, to almost 275,000.
The average IRA contribution was $4,300 in 2021, and 62% of IRA contributions went to Roth accounts.
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The post 401(k) balances break record in Q4: Fidelity appeared first on InvestmentNews.
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