According to recent data released by Fidelity Investments, balances in 401(k) retirement accounts reached their “second-highest average on record” in the last quarter of 2024.
Fidelity’s latest fourth-quarter retirement analysis revealed that the average balance for these retirement plans rose to $131,700, indicating an 11% year-over-year increase.
However, when compared to the third quarter of 2024, the average balances for 401(k)s experienced a slight decline of 0.5%. The third quarter had previously marked the highest average balance recorded, at $132,300.
In terms of contributions, the percentage of holders adding to their 401(k) accounts improved slightly to 14.1% year-over-year in the fourth quarter, according to Fidelity’s analysis.
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Similar trends were observed for two other common retirement accounts—IRAs and 403(b)s—which experienced minor downturns of 1% from the previous quarter yet registered year-over-year growth.
The average balance for 403(b) accounts stood at $117,800 in the fourth quarter, which reflects an 11% increase over the past year.
IRA accounts also fared well, with average balances reaching $127,543, marking an 8% rise from the same period in 2023, as noted in the report.
The analysis encompassed over 50 million retirement accounts, indicating a overall positive growth for individuals working on building their retirement savings in 2024.
Fidelity reported that nearly 40% of people saving for retirement increased their contribution rates, averaging an uptick of 2.9%.
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“For several quarters, we have seen encouraging savings trends in Q4,” stated Roger Stiles, Head of Fidelity Wealth. “This is particularly significant for many Gen X savers who may take advantage of catch-up contributions as the April tax deadline approaches, offering a potential for tax deductions through IRA contributions for 2024.”
According to the IRS, the individual tax return filing deadline is April 15.
Fidelity also specifically addressed the retirement savings patterns of Generation X, defined as those born between 1965 and 1980, in its recent report.
For IRAs, Gen Xers increased their average contributions by 16% year-over-year, Fidelity found.
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Additionally, Gen Xers who have consistently contributed to their 401(k) accounts for over 15 years reported average account balances of $589,400, representing an 18% rise from the prior year, according to data from Fidelity.
According to a study published by Northwestern Mutual last year, Americans believe that a retirement savings goal of $1.46 million is ideal for a comfortable retirement.
The Transamerica Center for Retirement Studies reported in an August 2024 study that the median retirement age for middle-class retirees stands at 62.
