The COVID-19 pandemic has made us rethink many aspects of everyday life, such as health, jobs, where we live, financial future, education, travel, and capture. simple hand. But according to data released Tuesday, many savers are still finding their way into retirement.
The combination of a stronger market, pandemic-related stimulus opportunities and steady, disciplined investment in the second quarter gave Fidelity Investments the cause for optimism. The company publishes its analysis of quarterly retirement trends among investors and employers, noting a double-digit increase in its 401 (k) plans and individual retirement accounts. multiply.
Read: COVID-19’s next threat to your 401 (k)
The company also says 11% of employers have reduced or eliminated their employer’s suitors for a retirement plan and about a third of them said they would recover. within the next year (another half says they will do so financially as soon as possible). The average employer contribution in the second quarter of the year was $ 1,080 – a figure about three-quarters of all employees receive.
See: Here’s how much money you’ll need to retire – and how COVID-19 will change that
Fidelity found that retirees didn’t stop saving. Nearly nine out of 10 401 (k) (88%) account holders contributed to their account in the second quarter, which ran from April, May and June. In which, 9% increase contribution rate. Most (96%) of 403 (b) account holders maintained or increased their percentage of contributions for the same month.
The average second quarter’s 401 (k) balance was $ 104,400, up 14% from the first quarter but down 2% from the same period last year. 403 (b) account balance averaged $ 91,100, up 17% q-o-q and also 3% y-o-y. Personal retirement accounts for an average of $ 111,500, up 13% from the first quarter and just slightly better than the $ 110,400 average in the same period last year.
Also see: Is Suze Orman correct? Is the traditional IRA really the wrong investment for retirement?
Millennials continue to support the Roth IRA, which is financed in after-tax dollars but can be withdrawn tax-free. This generation generated 23% more IRA accounts in Q2 2020. Roth IRAs specifically saw a 36% year-on-year growth (with a 50% increase in share).
Read: The Roth strategy we wanted us to build for early retirement
Not all retirement savers are optimistic. The pandemic has left millions of Americans out of jobs, some of them close to retirement age and still not enough to retire. The CARES Act, passed in March, allows savings depositors to withdraw more than usual from their retirement accounts, although financial advisers encourage consumers to think twice before doing so. so.