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November 07, 2018 at 08:21 AM
Fidelity Investments, the No. 1 recordkeeper for 401(k) plans, reports that the number of retirement plan millionaires has soared.
At the end of the third quarter, Fidelity says 187,400 401(k) participants in accounts that it services had $1 million or more in assets, up 41% from a year ago. In addition, 170,400 of Fidelity’s IRA account holders had topped the million-dollar-asset level, up 25% from a year ago.
The average balances for retirement plans Fidelity serves also rose, reaching a record high of $106,500 in the third quarter, up 2.4% from a year ago.
“We’ve seen an increasing amount of positive savings behavior over the last 10 years, which helped put many people back on track to reach their retirement goals,” said Kevin Barry, president of workplace investing at Fidelity Investments, in a statement.
Since that time account balances in 401(k), IRA and 403(b) plans serviced by Fidelity have roughly doubled, reflecting gains in the market and increased contributions from employees and employers, in a roughly two-to-one split.
The average savings rate combining employee and employer contributions rose to 13.1% in the third quarter of 2018, from 12.3% in 2016 (2017 stats were not disclosed) and the average contribution over the past 12 months was $6,800 for employees and $3,900 for employers.
The average 401(k) contribution rate for employees alone reached 8.7%, the highest rate since the fourth quarter of 2006; the contribution rate for women climbed to a record high of 8.5%.
