A Year in Review for Retirement Savers
Total 401(k) savings rates
Total average 401(k) savings rates remained steady this quarter at 14.1%, which is up slightly from a year ago (13.9%). Driven by employee and employer 401(k) contributions (9.4% and 4.7%, respectively), this savings rate continues to be very close to Fidelity's suggested savings rate of 15%.
Average long-term balances
Long-term savers also saw a boost in account balances last year. Gen X4 15-year savers saw an 18% increase from a year ago ($508,000 vs. $589,400), and the average balance for Gen Z individuals who have been saving in their 401(k) for 5 years grew to $52,900 – an increase of 66% over the past year.
Contribution rates and employer match
Nearly 40% of retirement savers increased their contribution rate in 2024 – an average increase of 2.9%. Additionally, nearly 90% of savers overall received a contribution from their employer.
Growth within IRAs
There was growth among IRAs in 2024, where accounts grew by 13% and total assets increased 22.6% since Q4 2023. Gen X, in particular, experienced growth, with the average IRA contribution for that generation increasing 16% year-over-year, and the total number of IRAs increasing 11% from Q4 2023.
Spotlight: Retirement Reimagined
Americans are shifting the way they approach retirement – an evolution Fidelity recently explored in two research papers. "Rethinking Retirement" looks at how an aging workforce is leading employers to reevaluate retirement transition strategies; "Is Retirement Retiring?" examines the shift in employees working past the age of 65 and how offering supportive benefits can be advantageous to employees and employers.
.
63%
of employers have a workforce with at least 30% age 50 and above
41%
of retirees are working, have worked, or are currently seeking work
33%
of retirees work for mental stimulation
1 Fidelity business analysis of 16.8 million IRA accounts as of December 31, 2024. Considers only active participants with balance.
2 Fidelity Investments Q4 2024 401(k) data based on 26,700 corporate defined contribution plans and 24.5 million participants as of December 31, 2024. These figures include the advisor-sold market but exclude the tax-exempt market. Excluded from the behavioral statistics are non-qualified defined contribution plans and plans for Fidelity’s own employees.
3 Fidelity Investments Q4 2024 403(b) data based on 10,800 Tax-exempt plans and 8.9 million plan participants as of December 31, 2024. Considers average balance across all active plans for 6.55 million unique individuals employed in tax-exempt market.
4 Generations as defined by Pew Research: Baby Boomers are individuals born between 1946 – 1964, Gen X are individuals born between 1965-1980, Millennials include individuals born between 1981 – 1996 and Gen Z includes individuals born between 1997 – 2012.
