Have you ever wondered how your retirement savings compares to everyone else’s? Even though everyone will have their own unique goals, it’s still human nature to be very curious when it comes to how you stack up against your peers.
That’s one of the great things about the reports that come from Fidelity 401k plans. Every so often they will release statistics about things like 401k savings trends, contribution rates, and a whole lot more.
How are they able to do this? Fidelity is one of the largest 401k providers in the nation. They host over 20,000 corporate plans and manage over 12 million participants. With a customer group that large, there is a lot of valuable information you can gather about the way people save and grow their money.
Below are a few recent highlights from the Fidelity retirement trend reports:
Interesting Stats from Fidelity 401k Plans:
- The average 401k balance was $89,300 (as of the end of the fourth quarter of 2013). That’s up 15.5 percent from one year ago and double the 2009 low of $46,200. (Source)
- For people age 55 and older, the average 401k balance was $165,200.
- 78 percent of 401k growth was from positive stock market movement. The remaining 22 percent came from contributions made by the employers and employees.
- The average deferral rate (the amount the employees contributed from their paychecks) was 8 percent.
- For investors who had both 401k and IRA’s, their average balance was $261,400.
- 35 percent (over one-third) of participants who left their job in 2013 cashed out their 401k. The age bracket who committed this the most often were individuals who were between the ages of 20 and 39.
- 26 percent of employers will enroll their employees in their 401k plan automatically.
- For employees who were auto enrolled, their deferral rate dropped to 5 percent. Almost three-fourths of the companies surveyed started at 3% or less.
- The average employer contribution was 4.4 percent.
- Fidelity’s recommended total annual savings rate for most individuals is somewhere between 10 and 15 percent.
- Fidelity does offer an Annual Increase Program (AIP) designed to help savers to increase their deferral rate over time. Generally this is about 1 percent per year until the employee reaches the desired maximum savings rate.
- 77 percent of companies that use Fidelity’s 401k plans offered the AIP feature.
- Approximately 2 in 5 of the deferral increases recorded were due to the AIP.
Easily Keep Track of Your 401k:
Whether you already have a Fidelity 401k plan or retirement savings with anyone else, make it easy on yourself to keep track of your finances. Do what I do and use a free wealth management tool like this one from Personal Capital.
Every time you login you’ll get an updated snapshot of all your accounts, all in the same place. It’s a great way to keep your finger on your money without having to login to more than one account. That way you’ll be able to easily compare yourself to information like this and know how you’re doing with your retirement savings when compared to your peers.
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