Total savings rate for 401(k) savers hit a record level in Q1 2016, Fidelity reports.
Its quarterly analysis of Fidelity-administered 401(k) and individual retirement accounts (IRAs) finds the total savings rate for 401(k) savers, which combines individual contributions plus employer contributions, reached 12.7% in Q1, topping the previous record high of 12.5% in Q1 2008. In addition, a record 13.6% of 401(k) investors increased their savings rate in Q1, an increase from the previous high of 12.9% in Q1 of 2015.
Even Fidelity’s annual analysis of small business retirement plans found that for self-employed 401(k) accounts, self-employed (SEP) IRAs and Savings Incentive Match Plan for Employees (SIMPLE), contributions increased in every plan category.
The average 401(k) balance dipped slightly at the end of Q1 (to $87,300 vs. $87,900 at Q4 2015) and is down roughly 5% from the record high balance at the end of Q1 2015 ($91,800). The average IRA balance also decreased at the end of Q1, and is also down 5% from one year ago.
However, the average balance for people who have been in their 401(k) continuously for 10 years increased 2% year-over-year to $240,700. For long-term savers between the ages of 35 and 39—when, according to Fidelity, individuals should aim to have saved between two to three times their salary in retirement savings—the average balance was $131,000 at the end of Q1.The number of people in both an IRA and a 401(k) at Fidelity increased 7% in 2015 to almost 1.3 million individuals. While the average combined IRA/401(k) balance declined 2% year-over-year from $267,200 to $260,900, the average combined contribution amount increased 3% from $11,300 to $11,600.