Retirement balances for IRA and 401(k) accounts hit record levels, Fidelity says
Popular savings accounts saw double-digit year-over- year increases
Phil Blancato shares his advice for saving for the golden years
Americans’ retirement savings account balances hit record levels in the first quarter despite the financial challenges brought on by the coronavirus pandemic.
New data released by Fidelity Investments showed record balances among 401(k), 403(b) and IRA savings accounts in the first quarter of 2021, with double-digit percent increases when compared with the same quarter last year.
Here’s a look at the data:
- The average IRA balance was $130,000, a 31% increase from the same quarter last year.
- The average 401(k) balance increased to $123,900, up 36% year over year.
- The average 403(b) balance increased to a record $107,300, up 42% when compared with 2020.
HEALTH CARE COSTS IN RETIREMENT CLIMB TO NEW HIGH FOR COUPLES AND SINGLES
Fidelity Investments noted that consistent saving, employer contributions and stock market performance helped boost account balances. IRAs also received an added bump as some individuals made tax-deferred contributions before the tax deadline.
The first quarter was the second consecutive three-month period of record average savings balances recorded by the firm, which examined about 30 million accounts.
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Those extra savings may come in handy for singles and couples retiring soon.
As previously reported by FOX Business, retirement expenses have continued to rise, with the average 65-year-old, opposite-gender couple retiring in 2021 expected to spend about $300,000 on health care and medical expenses during retirement.
The estimated costs are $157,000 for single women and $143,000 for single men.
Those costs represent not only a new high but also a 30% increase from 10 years ago and a 1.7% increase from last year’s estimates, according to Fidelity Investments.