{"id":4369,"date":"2023-08-31T20:50:33","date_gmt":"2023-08-31T20:50:33","guid":{"rendered":"https:\/\/prosfunds.com\/finance\/savings\/retirement-account-balances-rise-despite-economic-turmoil-fidelity\/"},"modified":"2023-08-31T20:50:41","modified_gmt":"2023-08-31T20:50:41","slug":"retirement-account-balances-rise-despite-economic-turmoil-fidelity","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=4369","title":{"rendered":"Retirement account balances rise despite economic turmoil: Fidelity"},"content":{"rendered":"
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Despite economic volatility, retirement account balances increased in the first quarter of 2023 for the second quarter in a row, according to the latest data by Fidelity Investments.\u00a0<\/p>\n

The average IRA balance increased to $109,000 in Q1 2023, a 5%\u00a0rise from Q4 2022.<\/p>\n

In addition, the average 401(k) balance jumped to $108,200, a 4% spike from Q4 2022 and the average 403(b) account balance rose to $97,900, up 6% from Q4 2022.\u00a0<\/p>\n

Plus, 401(k) contribution rates also increased in Q1 2023, Fidelity reported. Total 401(k) savings rates, which included employer-matching contributions,\u00a0increased to 14%, up from 13.7% in Q4 2022. That brings 401(k) savings rates close to Fidelity\u2019s recommended 15% contribution rates.\u00a0<\/p>\n

Even though the U.S. has been experiencing a time of stubborn inflation, record-high debt and rising interest rates, Americans’ retirement readiness may be on a brighter path, Fidelity projected.\u00a0<\/p>\n

“With U.S. employers adding 1 million jobs to the economy in the first quarter of 2023, Americans appear to be refocusing on investing in their future,” Fidelity said in its report.\u00a0<\/p>\n

If high-interest debt is getting in the way of your retirement savings strategy, you could consider paying it down with a personal loan at a lower interest rate. Visit Credible to get your personalized rate in minutes.\u00a0<\/p>\n

AMERICA’S DEBT HITS NEW RECORD OF MORE THAN $17 TRILLION: NY FED<\/strong><\/p>\n

Employer 401(k) contributions reach record-high levels<\/strong><\/h2>\n

The average 401(k) employer matching contribution reached a record 4.8% in Q1, Fidelity said. Moreover, 85% of workers received some type of employer 401(k) contribution in Q1 and 78% of workers contributed enough money to their 401(k) to earn the full matching contribution from their employers.\u00a0<\/p>\n

Some employers provide eligible workers with matching contributions. Generally, these are additional contributions that employers make to their employee\u2019s retirement plans calculated as a percentage of the contributions employees make, up to a certain limit, according to a post by Empower. But in some cases, employees need to contribute a certain amount to their retirement plans before they become eligible for matching contributions.\u00a0<\/p>\n

“We are encouraged to see positive gains for retirement savers, evidenced through rising account balances, improved savings rates and a commitment by employers \u2013 including small businesses \u2013 to help employees prepare for the future,” Kevin Barry, president of Workplace Investing at Fidelity, said in a statement.\u00a0<\/p>\n

If you want to make more room in your budget for retirement savings, you could consider eliminating high-interest debt with a personal loan at a lower rate. Visit Credible to compare options from multiple lenders at once, without affecting your credit score.\u00a0<\/p>\n

NEARLY HALF OF AMERICANS CASH OUT 401(K)S WHEN CHANGING JOBS<\/strong><\/p>\n

Secure 2.0 Act launched to improve America\u2019s retirement readiness\u00a0<\/strong><\/h2>\n

Before retirement plan balances and contributions rates increased in Q1, the Secure 2.0 Act \u2013 which aims to rejuvenate the retirement plan system and help Americans maximize their savings \u2013 was signed into law in December 2022.\u00a0<\/p>\n

Here are some of its highlights:<\/p>\n