Retirement and 401(k) savings posted an increase in this year’s first quarter, with Generation Z and Baby Boomers leading the way, a report from Fidelity Investments showed.
The financial services company said it found in the Retirement Savings Analysis it released May 25 that members of Gen Z saw their 401(k) account on average jump 17% quarter-over-quarter in terms of their balances. The increase from 2022’s first quarter was double that, according to Fidelity Investments.
Their savings rate for 401(k) experienced a slight boost compared to the prior quarter, coming in at 10.5%, the Fidelity Investments study found. The generation also increasingly opened IRA accounts, with the company reporting a year-over-year spike of 25%.
Meanwhile, Fidelity Investments said Baby Boomers "continue to save at the highest levels" of all the generations looked at. For them, their 401(k) savings rate climbed 0.2% to hit 16.7% in the first quarter.
A person puts money into a retirement savings jar. (iStock / iStock)
The report showed increases in the average balances of IRA, 401(k) and 403(b) accounts overall, with 403(b)s climbing the most on a quarterly basis. It looked at over 44.5 million accounts.That type of account had a lift of 6% to $97,900 in the first quarter, according to Fidelity Investments.
IRAs, at $109,000 for the average balance in an account, rose 5%, while 401(k) account balances went up 1% less, hitting $108,200, the study said.
Fidelity Investments credited "improving market conditions and an increase in contributions from employers" with driving the account balance growth.
A mature couple calculating bills to pay, checking domestic finances, middle-aged family managing, planning budget and expenses. (Istock / iStock)
401(k) plans ensure Americans have enough money to live on after they retire and no longer receive an annual wage. (Getty / Getty Images)
The three respective types of accounts had also previously seen growth in terms of average balances in the fourth-quarter, the company said.
In March, Fidelity Investments reported just under three-quarters of working Americans said in a survey that they anticipated their retirement lifestyle would be "very comfortable" or "somewhat comfortable." For Gen Z and Y, 22% said they had expectations of a "very comfortable" retired life, while it was 20% for Boomers.
According to the Internal Revenue Service, Americans under the age of 50 are limited to putting $6,500 in their IRAs this year. 401(k)s and 403(b)s can receive up to $22,500 in employee contributions, the agency said.