Retirement account balances hit record high
A T. Rowe Price study found a strong connection between financial performance of companies and the quality of their 401(k) plans. FBN’s Liz Claman with more.
Retirement savings swelled in the third quarter, with average 401(k), 403(b) and IRA account balances hitting record highs, according to a Fidelity Investments report.
The average 401(k) balance hit $106,500, the average IRA balance increased to $111,000, while the average 403(b) balance reached $85,500. The amounts predate the market volatility that hit in October. All of the balances are about double what they were 10 years ago.
There was also growth in the number of 401(k) and IRA millionaires, with the number of people with $1 million or more in their 401(k) increasing to 187,400 at the end of the third quarter, an increase of 41 percent from the 133,000 401(k) millionaires in the third quarter of 2017 and nearly 10 times the 19,300 savers with a $1 million balance in their 401(k) accounts in the third quarter of 2008. The number of IRA millionaires increased to 170,400 in the third quarter of 2018, an increase of 25 percent over a year ago.
Among other encouraging developments in American’s retirement savings, according to the Fidelity report, is the contribution rate for women investors reaching a record of 8.5 percent, while the average balance for millennials who have had their retirement plan for five years straight topped $80,000 and the average balance for 10-year continuous savers topped $300,000.