Average 401(k) Balance Reached $99,900 in Third Quarter

This is a 2.25% increase from the average balance in the second quarter of the year.

In the third quarter, the average 401(k) balance that Fidelity Investments administers reached $99,900, a 2.25% increase from $97,700 in the previous quarter—and a 31.27% increase from the average $76,100 balance five years ago.

Individual retirement account (IRA) balances rose as well, to $103,500 in the third quarter, up 23.76% from the average balance of $101,700 in the second quarter—and a 35.12% increase from the average balance of $76,600 five years ago. Both the 401(k) and IRA figures for the third quarter are at record levels, Fidelity says.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Fidelity says that while a strong market helped investors, they are also taking more initiative to save for retirement, with the average contribution rate to 401(k) plans reaching 8.5% in the third quarter. Twenty-nine percent of 401(k) participants have increased their savings rate so far this year. Meanwhile, contributions to Roth IRAs are up 13% year-to-date.

Fidelity also says that by the end of the third quarter, 29% of all Fidelity assets in 401(k)s were held in target-date funds, up from 18% in the third quarter of 2012.

“Two of the most important aspects of a retirement savings strategy are how much an individual contributes and how they allocate their savings,” says Jeanne Thompson, senior vice president at Fidelity. “The increasing use of target-date funds, along with the increasing number of individuals contributing more to their retirement accounts, can help ensure people are saving at the right level and have a diversified mix of assets.”

Fidelity also reports that the number of health savings account (HSA) holders increased 35% in the third quarter from the year earlier. People who had both an HSA and a 401(k) contributed more to their 401(k)—9.9%—than the 8.5% of those with only a 401(k). 

«