The Average 401K Balance And Savings Rate In America Has Hit An All-Time High
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Saving for retirement, while essential, is not always the most exciting use of money. You have to put off today’s wants for financial security at some undisclosed time in the future. That is probably why the average 401K balance for people under 30 can only be described as alarmingly low. Today, new 401K stats have come out to show us that there is some hope.
According to the latest 401K data report from Fidelity, the average 401K balance is now $129,300. That is up a lot from the April 2020 low of $91,400.
But wait, there’s more!
The average 401K balance is a little over $400,000 for workers who have had their account for over a decade. And, for those who have held on for more than 15 years, the average account size is over $512,000. That said, millennials with 15-year-old 401K accounts only have an average balance of $280,000.
While the averages in these reports will always be skewed by the biggest balances, Fidelity also reported that over the last year, the average 401(k) balances have risen 24%, and IRA balances are up 21%.
According to CNBC, savings rates in 401K is up across all generations as well.
The average savings rate for 401(k) contributors increased to 9.3%. Young workers seemed particularly confident about their finances: 54% of Gen Z savers with a retirement account increased how much they were contributing over the past year, as did 43% of millennials. Just 7% of workers have decreased their savings rate in the past 12 months.
As always, there are many paths to financial freedom or a big 401K balance. But one of the best ways to secure your financial future is to save early and save often.