Fidelity Investments’ analysis of over 45 million retirement accounts reveals that 401(k) and IRA savings have rebounded significantly in the first quarter of 2024. The average 401(k) balance reached $118,600, a 9% increase from the end of 2023 and a 17% increase year-over-year. IRA balances also surged, with the average reaching $123,700, up 8% from the previous quarter and 18% from a year ago.
This growth is attributed to strong market performance, with the S&P 500 rising by over 10% during the quarter. Contributing factors include consistent savings habits, with many participants maintaining their contribution rates. The average 401(k) contribution rate remained steady at 8.8%, and when combined with employer contributions, the total savings rate averaged 13.7%.
Gen Z savers continue to demonstrate impressive savings behaviors, with an average contribution rate of 10%. The number of 401(k) and IRA millionaires also increased substantially, reflecting the positive market conditions and the power of long-term investing. The report indicates a generally positive outlook for retirement savings, boosted by market gains and sustained contribution levels across different age groups.
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