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401(k) Investors Who Stayed the Course Rewarded with Significant Gains

Industry Trends and Research

Despite a rocky end to 2018 and predictions of an impending recession, those who stayed the course with their 401(k) were rewarded with a generous first quarter rebound and even more impressive 10-year totals on the anniversary of the stock market low.

Buoyed by positive stock market performance as well as record contribution levels, Fidelity Investments’ first quarter 2019 analysis of retirement savings trends shows that the average 401(k) balance rose to $103,700, resulting in an 8% increase from $95,600 in the fourth quarter of 2018.

Similarly, the average IRA balance increased to $107,100, a 9% increase from last quarter and 2% higher than the $105,100 balance one year ago. The average 403(b) account balance increased to $85,800 — also a 9% increase from last quarter and up 2% from the first quarter of 2018.

Perhaps the only downside from Fidelity’s data is that the year-over-year average 401(k) balance is up roughly 1% from $102,900 in the first quarter of 2018.

Meanwhile, the number of 401(k) millionaires is also up. According to Fidelity’s data, those with $1 million or more in their 401(k) increased 34% to 180,000, up from 133,800 since the end of 2018, while the number of IRA millionaires also increased to 168,100, up from 138,800 last quarter.

Contributions Hit Record Levels

Even more encouraging is that the average 401(k) employee contribution amount reached a record level of $2,370 in the first quarter — a 15% increase over one year earlier. In addition, the average 401(k) employer contribution reached $1,780 in first quarter — a record high and a 6% increase from a year earlier.

The average 401(k) employer contribution rate as a percentage of salary reached 4.7% in the first quarter, which was also a record high and boosted the average total savings rate – employee contributions plus company match – to an all-time high of 13.5% in the first quarter.

In addition, Fidelity’s data shows that contributions to 403(b) retirement accounts also increased to record levels, with the average employee contribution amount reaching $1,700 in the first quarter, while the average employer contribution increased to $1,430.

Then and Now

Considering the 10-year anniversary of the stock market reaching all-time lows during the financial downturn, Fidelity examined the accounts of 1.64 million individuals who have had the same 401(k) account since the first quarter of 2009 and compared their current balance with their average balance.

The following table – which shows extraordinary results – outlines the overall increase in balances for this group, along with specific analysis for Millennials, Gen Xers and Boomers within the overall population of 10-year continuous savers:


  Average 401(k) balance: 

Q1 2009

Average 401(k) balance:

Q1 2019

Cumulative percentage change
Overall $52,600 $297,700 466%
Millennials $7,000 $129,800 1762%
Gen X $37,000 $268,900 626%
Boomers $76,500 $357,200 367% 

Balanced Allocations

Fidelity’s 10-year analysis also highlights how the average asset allocation within 401(k) accounts has gradually shifted to become more diversified, which can be partially attributed to the increasing use of TDFs among 401(k) savers.

As of the first quarter, 52% of individuals had all of their 401(k) savings in a TDF, compared with just 16% in the first quarter of 2009.

In addition, the analysis shows that a much lower percentage of individuals had all of their 401(k) savings in stocks; only 7% of individuals had an all-stock 401(k), compared with 15% who had an all-stock 401(k) allocation in the first quarter of 2009.

The combined average balances for savers with both a workplace retirement plan, such as a 401(k) or 403(b), and an IRA reached $307,600, a record high and an increase of 9% from the combined average balance of $281,000 at the end of 2018.