Market Overview

Fidelity Q2 Retirement Analysis: Account Balances Rebound, While Auto Enrollment Continues to Drive Positive Savings Behavior


®, one of the most diversified
financial services companies with more than $7.0 trillion in client
assets, today released its quarterly analysis of retirement savings
trends, including account balances, contributions, savings behavior and
details on workplace savings plan design. Highlights from Fidelity's Q2
analysis, which is based on more than 30 million retirement accounts,

  • Average individual 401(k),
    403(b) and IRA
    account balances bounce back from dip in Q1,
    show solid year-over-year growth.
    The average 401(k) balance
    increased to $104,000, just under the all-time high balance of
    $104,300 from Q4 2017. The average balance represents a one percent
    increase from last quarter and a six percent increase from one year
    ago. The average IRA balance increased to $106,900, almost a two
    percent increase from last quarter and almost a seven percent increase
    from Q2 2017. The average 403(b) account was $83,400, almost a two
    percent increase from Q1 2017 and a five percent increase

Average Retirement Account Balances

        Q2 2018     Q1 2018     Q2 2017     Q2 2013


      $104,000     $102,900     $97,700     $80,800




    $105,100     $100,200     $80,600


      $83,400     $82,100     $78,900     $62,000
  • Percentage of employees with a 401(k) loan drops to lowest level
    since 2009.
    The percentage of workers with an outstanding 401(k)
    loan dropped to 20.5 percent, the lowest percentage since it was 19.9
    in Q2 2009. Among Gen X workers, who historically have the highest
    outstanding loan rate, the percentage dropped for the third straight
    quarter to 26.4. The percentage of new loans initiated dropped for the
    second straight quarter to 9.7, the lowest mark since Q1 2017.
  • More millennials4 using IRAs
    for retirement savings.
    Among IRA holders, millennials continued
    to utilize both Traditional and Roth IRAs for retirement savings in
    Q2. The average IRA balance for millennials increased nine percent in
    Q2 2018 to $15,150, and number of millennials making contributions
    increased 19 percent over a year ago. Roth IRAs continued to be a
    popular investment option for millennials, as 75 percent of IRA
    accounts that received a contribution from a millennial in Q2 were
    Roth IRAs, representing more than two thirds (69 percent) of
    millennials' contribution dollars.
  • Number of 401(k) and IRA millionaires continues to increase. The
    number of people with $1 million or more in their 401(k) increased to
    168,000 at the end of Q2, an increase of 49,000 from Q2 2017. In
    addition, the percentage of 401(k) millionaires who are women
    increased to more than one in five (21 percent). Among IRA holders,
    the number of clients with $1 million or more in their account reached
    156,000 at the end of Q2, 26 percent of which were women.

"The stock market's performance over the past several years has
definitely helped retirement savers, but now would good time for
investors to take a moment and make sure they are doing their part to
meet their retirement goals," said Kevin Barry, president of workplace
investing at Fidelity Investments. "Markets may go up and down, but
there are a number of steps individuals can take, such as considering a
Roth IRA, increasing your savings rate and avoiding 401(k) loans, which
can play an important role in their long-term savings success."

10-Year Analysis Shows Positive Impact of Auto Enrollment on Savings
and Participation

Fidelity's Q2 analysis also examines how auto enrollment (AE) has
impacted savings behavior and plan design since 2008. As of the end of
Q2, 33 percent of Fidelity's 22,600 401(k) plans auto enroll new
employees, more than double the percentage (15 percent) that auto
enrolled employees in 2008. And among the largest 401(k) plans
(companies with more than 50,000 employees), 61 percent automatically
enroll new employees.

  • Employers are increasing the default savings rate in 401(k) plans.
    The average "default savings rate" – which is the percentage of
    pre-tax pay employers select for employees who are automatically
    enrolled in their 401(k) – rose to 3.9 percent in Q2 after five
    straight quarters at 3.8 percent. Among mid-sized companies with
    25,000-50,000 employees, the average default savings rate increases to
    4.6 percent. In addition, the percentage of employers that default at
    6 percent or more has more than doubled over the last decade – now
    almost 1 in 5 employers (19 percent) utilize a default savings rate of
    6 percent or higher.
  • Employees who are automatically enrolled stay in their plan.
    Average participation rates among plans with AE were 87 percent in Q2,
    compared with a participation rate of 52 percent among plans that do
    not auto enroll new employees. The impact of auto enrollment was
    especially significant among millennials – the participation rate for
    millennials within AE plans was 87 percent at the end of 20175,
    more than double the participation rate for millennials in plans that
    did not auto enroll (41 percent).
  • Employees who are automatically enrolled tend to save more.
    Since 2008, the average savings rate among employees who were
    automatically enrolled in their 401(k) has increased from 4.0 percent
    to 6.7 percent. Also, workers who are auto enrolled don't necessarily
    "set it and forget it" – over the past 10 years, nearly two-thirds (63
    percent) of auto enrolled employees have increased their savings rate.

"As retirement savings plans continue to evolve to meet the changing
needs of today's workforce, it's clear the one feature that has really
had a positive impact on the retirement landscape over the past decade
is auto enrollment," concluded Barry. "Auto enrollment positioned an
entire generation of workers to build their retirement nest eggs."

For more information on Fidelity's Q2 analysis, please click here
to access Fidelity's "Building Futures" overview, which provides
additional details and insight on retirement trends and data.

About Fidelity Investments
mission is to inspire better futures and deliver better outcomes for the
customers and businesses we serve. With assets under administration of
$7.2 trillion, including managed assets of $2.6 trillion as of July 31,
2018, we focus on meeting the unique needs of a diverse set of
customers: helping more than 27 million people invest their own life
savings, 23,000 businesses manage employee benefit programs, as well as
providing more than 12,500 financial advisory firms with investment and
technology solutions to invest their own clients' money. Privately held
for 70 years, Fidelity employs more than 40,000 associates who are
focused on the long-term success of our customers. For more information
about Fidelity Investments, visit

Keep in mind that investing involves risk. The value of your investment
will fluctuate over time, and you may gain or lose money.

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem
Street, Smithfield, RI 02917

Fidelity Investments Institutional Services Company, Inc.,
Salem Street, Smithfield, RI 02917

National Financial Services LLC, Member NYSE, SIPC,
200 Seaport
Boulevard, Boston, MA 02110


© 2018 FMR LLC. All rights reserved.

1Analysis based on 22,600 corporate defined contribution
plans and 16.1 million participants as of June 30, 2018. 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.
IRA analysis is based on 10.2 million IRA accounts, as of June 30, 2018.
based on 10,700 defined contribution plans, including 403(b), 401(a),
401(k) and 457(b) qualified plans, and 5.7 million participant accounts,
in the tax-exempt market, as of June 30, 2018.
Generational start/end dates were chosen to align with Pew Research.
Boomers (born 1946 - 1964), Gen X (born 1965 - 1980), and Millennials
(born 1981 - 1997).
5 Participation rates are measured
on a yearly basis, and latest data available is as of year-end 2017.

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