The last few years have brought considerable changes to the workforce – including what’s been dubbed the “Great Resignation,” with people leaving jobs. However, as we head into 2022, saving for retirement continues to be a priority.
According to Fidelity, account balances and contribution are nearing record levels. So, while people are seeking new employment opportunities – or not – they are still focused on preparing for retirement by saving, saving, saving.
According to Fidelity, the average IRA balance in 2021 was $135,600 – up 6% from 2020. And the average 401(k) balance was $130,700 – up 8% from a year ago.
In fact, Fidelity reports that nearly 40% of investors increased their 401(k) contributions last year.
So, what does this mean? In a nutshell, employers are continuing to play a crucial role in helping keep their employees saving for retirement.
Some of the biggest savers come from Generation Z – meaning young workers are committed to planning to saving for retirement. Fidelity states that the total number of their IRA accounts increased to 12.3 million last year – a 13% jump. And the highest level of growth came from Gen Z investors.
Gen Z investors are also increasing their contribution rate, 53% according to Fidelity.
Employers are sharing the load, with 83% of employees having their company make a contribution to their 401(k) in 2021. The average employer contribution was about $4,000.
In the midst of the “Great Resignation,” as employees change jobs, they are moving their money as they go – and continuing to save. They aren’t cashing out of their 401(k) when they change jobs, they are taking the money with them.
Do you still have questions about retirement planning options?
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