Balances and contributions in 401(k) plans, as well as individual retirement
accounts (IRAs), reached record levels in 2016, Fidelity Investments reports.
401(k) balances averaged $92,500 at the end of the fourth quarter, rising by an
average of $4,300 from the year prior.
Investors opened nearly half a million IRA accounts with Fidelity last year, bringing the total number of IRA accounts on Fidelity’s platform to more than 8.5 million. The average IRA balance was $93,700, up $3,600 from the year before.
The total amount that people contributed to their 401(k) plan in 2016, including company matches, averaged $10,200, another record, Fidelity says.
Meanwhile, the percentage of people with an outstanding 401(k) loan dropped to 21%, the lowest it has been since the fourth quarter of 2009.
“Key to a successful retirement strategy is having a solid contribution rate and not tapping your 401(k) for short-term expenses,” says Kevin Barry, president of workplace investing at Fidelity. “More than one in four Fidelity 401(k) savers increased their savings rate in 2016—an all-time high—and the number of people with a 401(k) loan dropped to its lowest point in seven years. This shows people are taking the right steps towards reaching their retirement savings goals and illustrates how the 401(k) is helping millions of people prepare for retirement.”