Americans are again squirreling away large amounts of money for retirement. The rate of contributions reached a healthy 8.4 percent during the fourth quarter. This is the maximum since the 2008 second quarter. Among Fidelity’s 401(K) customers, one in four increased their rate of savings in 2016. This is the maximum rate of savings in history.
The median 401(k) balance of Fidelity Investment reached a peak of about $92,500 during end 2016. This number is 4,300 more than 2015 and higher than the previous record of $92,100 during the early days of 2015. The financial firm cited both increasing stock prices and bugger contributions. Fidelity is one of the biggest investment firms in the United States.
More contributions are also pouring in from people who have their own retirement plans outside of employment. The median balance kept in the Individual Retirement Accounts or IRA of Fidelity was $93,700 at end 2016. This was an increase of 3,600 from 2015. Almost 500,000 accounts got added in 2016. This pushes the total imposed on the platform to a stunning 8.5 million.
The median contribution rate touched 8.4 percent during fourth quarter. This figure remains the highest since 2008’s second quarter. A large number of 401(K) customers of Fidelity has persistently stepped up their rate of savings in 2016. This is the maximum ever recorded. If Kevin Barry, the president in charge of workplace investing, is to be believed, people are taking corrective steps to reach their respective retirement savings goals.
Trends and more
A survey conducted by IPSOS/USA Today in the middle of January found that 65 percent of those aged between 45 and 65 year olds have put in a minimum of $100 towards retirement funding over the subsequent six months. It is also evident that Americans are much less likely to borrow from 401(k)s to finance their living expenses.
According to Investment Company Institute, similar trends were mirrored nationwide. The total number of 401(k) plan assets in America hit record $4.8 trillion during third quarter. The total IRA assets climbed to a record creating $7.8 trillion. This is a sea change from 2008 when a number of Americans contributed less to their retirement accounts. There was wide scale recession and financial crisis at that time. Workers have a memory of those hard times and with the unemployment rate at 4.7 percent, salaries are again being conserved to be spent in their post retirement years.