BOSTON – 2022 was a rough year for retirement savers, with average 401(k) balances down 23% compared with a year prior, according to a new report from Fidelity Investments Inc.
Market volatility, natural disasters and global political unrest were among the factors hitting retirement savers hard, according to Fidelity’s 2022 retirement analysis. The average balance among 401(k) holders was $103,900 as of the fourth quarter of 2022, down from $130,700 in the fourth quarter of 2021. IRA and 403(b) balances also fell year over year, down 23.3% and 19.5%, respectively.
One bright spot: quarter-over-quarter balances increased slightly from the third to the fourth quarter of 2022, with a 7% bump in 401(k) balances, a 6% increase in 403(b) balances and a 2% increase in IRA balances.
Economic headwinds also haven’t stopped retirement savers from building their nest eggs, with 401(k) savings rates holding steady at 13.7%, and the number of IRAs within Fidelity’s platform increasing to 13.6 million, up 10.2% over a year ago. according to the report. Meanwhile, the percentage of employees with outstanding 401(k) loans continues to drop, with the 16.7% of savers with outstanding loans marking the lowest percentage on record, down 17% over a year ago, the report stated.
“The data shows that retirement savers understand the importance of saving for the long-term, despite market shifts,” Kevin Barry, Fidelity’s president of workplace investing, said in a statement. “Given all the stresses in the world today, such as natural disasters and geo-political events, we are encouraged to see people look past the current volatility and continue to make smart choices for their future.”
The report reflects information from 24,500 corporate defined contribution plans and 22 million participants as of Dec. 31, 2022.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
