Please ensure Javascript is enabled for purposes of website accessibility
401(K) Accounts Hit Records as Workers Sock Away More, Stocks Jump
gvw_ap_news
By Associated Press
Published 5 years ago on
February 13, 2020

Share

NEW YORK — How’s your 401(k) doing?
President Donald Trump likes to ask that question around the country, sometimes throwing out big gains like 90% or 95%. The average 401(k) did indeed hit a record last year, although its growth was considerably less than that.
The average 401(k) balance rose 17% last year to $112,300 from the end of 2018, according to a review of 17.3 million accounts by Fidelity Investments. The average individual retirement account, or IRA, balance rose the same percentage to $115,400.
Those figures are averages, not medians, and the typical 401(k) might be closer to a quarter of that. The top 1% of 401(k) savers has more than $1 million in each of their accounts, which skews the average higher.
Surging markets around the world were a big reason for growth across accounts in 2019: The S&P 500 index had one of its best years in decades with a 31.5% return. Investments of all types logged gains, from junk bonds to stocks from developing economies.
But workers’ better savings habits also played a big role.

In Many Cases, Workers May Not Even Realize They’re Saving More

Fidelity said the average worker set aside 8.9% of their pay in their 401(k) in the fourth quarter, a record. Combined with employer matches, the average total savings rate was 13.5% in the quarter, tying its record last reached in the spring of 2019.

“Nobody can control the market, so the behaviors of people contributing to their 401(k)s are what get us the most excited. We have people saving 13.5%, which is really close to the 15% that we recommend. That’s a great story.” — Katie Taylor, vice president of thought leadership at Fidelity 
“Nobody can control the market, so the behaviors of people contributing to their 401(k)s are what get us the most excited,” said Katie Taylor, vice president of thought leadership at Fidelity. “We have people saving 13.5%, which is really close to the 15% that we recommend. That’s a great story.”
In many cases, workers may not even realize they’re saving more. Most employers give the option for workers to automatically increase their contributions each year, without having to do anything. Some employers even automatically sign up their employees for these auto-escalation programs, requiring them to opt out if they don’t want their contribution levels to steadily rise.
Such features are on top of programs where employers automatically enroll new hires in the 401(k) plan. They all lean on the power of inertia to help workers build up bigger nest eggs. It’s a sharp turnaround from earlier years when workers had to take an extra step to join the 401(k) plan and fill out paperwork whenever they wanted their contribution levels to change.
“There’s always a way, if you don’t want to do it, where you can unenroll, but these automatic programs have been a game changer,” Taylor said.
Consistent contributions — and giving them time to grow — are keys to building bigger portfolios. Among workers who have been in their 401(k) plan for 10 straight years, the average balance rose to a record $328,200, according to Fidelity.

Other Investment Firms Have Similar Chasms Between Median and Average Balances

That figure is the average, which means big portfolios of just a few savers can skew the number higher. Fidelity said it counts 233,000 people with $1 million or more in their 401(k) accounts, or 1.3% of all its participants.
The median, which shows the midpoint of what savers have, is much lower. Across all the 401(k) accounts Fidelity surveyed, the median balance was $27,000. That’s also a record and up nearly 18% from a year earlier.
Fidelity says it prefers looking at average figures because the median is also skewed by people who have $0 balances in their 401(k) after they started a new job or rolled their 401(k) savings into another account.
Other investment firms have similar chasms between median and average balances. At Vanguard, the median balance was $22,217 in 2018, well below the average of $92,148, for example.
Such figures also , though, count only people who have a 401(k). Many lower-income workers, particularly at smaller employers, could not save in a 401(k) even if they wanted to because their companies don’t offer access to one. Legislation passed late last year aims to make it easier for smaller employers to band together and offer plans.
Nearly half of all U.S. households aged 55 and over, 48%, had no retirement savings at all as of 2016, according to estimates from the Government Accountability Office.

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

The Democrats’ Problems Are Bigger Than You Think

DON'T MISS

How Much Will Fresno Unified Trustee’s Steak Dinner Cost After FPPC Fine?

DON'T MISS

Does US Law Allow Trump to Send Troops to Quell Protests?

DON'T MISS

Republican Congressman Green to Resign After Tax Bill Vote

DON'T MISS

UN Says Most Flour Delivered in Gaza Looted or Taken by Starving People

DON'T MISS

EU Confident It Will Avoid 500% US Tariffs Tied to Russian Energy Imports

DON'T MISS

Trump Says Iran Is Involved in Gaza Hostage Negotiations

DON'T MISS

First the National Guard, Will the Marines Be Next at LA Riots?

DON'T MISS

Hundreds Peacefully Protest ICE Raids in Downtown Fresno

DON'T MISS

A Trump Family Project Spurs Resignations and a Criminal Charge in Serbia

UP NEXT

Sights & Sounds: The 2025 Fresno Rainbow Pride Parade and Festival

UP NEXT

Doctors Were Preparing to Remove Their Organs. Then They Woke Up.

UP NEXT

FDA’s AI Assistant ‘Elsa’ Fails Its First Day on the Job

UP NEXT

8 Ways Musk and Trump Could Inflict Pain on Each Other

UP NEXT

D-Day Veterans Return to Normandy to Mark 81st Anniversary of Landings

UP NEXT

Lambda Legal, a Nonprofit Supporting LGBTQ+ Rights, Exceeded Fundraising Goal by $105M

UP NEXT

Trump Threatens Musk’s Government Deals as Feud Explodes Over Tax-Cut Bill

UP NEXT

Trump Amplifies Outlandish Robot Biden Conspiracy Theory

UP NEXT

American Doctors Are Moving to Canada To Escape the Trump Administration

UP NEXT

Loretta Swit, Emmy-winner Who Played Houlihan on Pioneering TV Series ‘M.A.S.H.,’ Has Died at 87

Britain and Allies Sanction Israeli Far-Right Ministers for ‘Inciting Violence’

1 hour ago

Trump Aide Criticizes Mexican President on Los Angeles Protests

2 hours ago

Do Americans Support Trump’s Use of Marines in LA? The Numbers Might Shock You

2 hours ago

Israeli Gunfire Kills 17 People Near Gaza Aid Site, Health Officials Say

2 hours ago

Parliament Member Corbyn Calls for Inquiry Into UK Role in Gaza War

3 hours ago

Turkey Condemns Interception of Gaza-Bound Aid Ship, Calls Israel a ‘Terror State’

3 hours ago

Andy Pages, Tommy Edman Deliver in 10th as Dodgers Edge Padres

3 hours ago

US Military Evaluating Options to Prevent Nuclear-Armed Iran, General Says

3 hours ago

Israeli Military Says Missile Launched From Yemen Toward Israel, Seeking to Intercept It

3 hours ago

Marines Will Deploy to LA for 60 Days, Costing Taxpayers $134 Million

3 hours ago

Wall Street Ends Higher as Investors Track Progress of US-China Trade Talks

(Reuters) – The S&P 500 ended higher on Tuesday, lifted by a rally in Tesla as investors bet on positive results from U.S.-China t...

9 minutes ago

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 5, 2025. REUTERS/Brendan McDermid/ File Photo
9 minutes ago

Wall Street Ends Higher as Investors Track Progress of US-China Trade Talks

A bridge crane damaged by Israeli air strikes is pictured in the Red Sea port of Hodeidah, Yemen July 31, 2024. REUTERS/Khaled Abdullah//File Photo
34 minutes ago

Israel Strikes Hodeidah Port, Threatens Naval, Air Blockade

U.S. President Donald Trump boards Air Force One as he departs for North Carolina at Joint Base Andrews, Maryland, U.S., June 10, 2025. REUTERS/Evelyn Hockstein
1 hour ago

Trump Warns Protests at Army Parade Will Be Met With Force

Far-right Israeli lawmakers Itamar Ben Gvir, center, and Bezalel Smotrich, right, attend the swearing-in ceremony for the new Israeli parliament, at the Knesset, or parliament, in Jerusalem, November 15, 2022. Maya Alleruzzo/Pool via REUTERS/ File Photo
1 hour ago

Britain and Allies Sanction Israeli Far-Right Ministers for ‘Inciting Violence’

Mexico's President Claudia Sheinbaum attends a press conference on the country's first judicial election, held on June 1, at the National Palace, in Mexico City, Mexico June 2, 2025. REUTERS/Henry Romero/File Photo
2 hours ago

Trump Aide Criticizes Mexican President on Los Angeles Protests

People attend a rally against federal immigration sweeps, in downtown Los Angeles, California, U.S. June 9, 2025. REUTERS/David Ryder
2 hours ago

Do Americans Support Trump’s Use of Marines in LA? The Numbers Might Shock You

Mourners react during the funeral of Palestinians killed by Israeli fire, according to the Gaza health ministry, near an aid distribution center in central Gaza, at Al-Shifa hospital, in Gaza City, June 10, 2025. REUTERS/Dawoud Abu Alkas
2 hours ago

Israeli Gunfire Kills 17 People Near Gaza Aid Site, Health Officials Say

Palestinians wait to receive food cooked by a charity kitchen, in Jabalia, in the northern Gaza Strip, May 19, 2025. REUTERS/Mahmoud Issa
3 hours ago

Parliament Member Corbyn Calls for Inquiry Into UK Role in Gaza War

Help continue the work that gets you the news that matters most.

Search

Send this to a friend