PROVIDENCE – Workers are leaving their jobs in droves, but they are not abandoning a commitment to boosting retirement savings, according to new research by Fidelity Investments Inc.
Account balances across a variety of savings accounts reached record levels by the end of 2021, fueled by higher contributions from individuals and their employers, according to Fidelity’s fourth-quarter analysis published on Feb. 17.
Average balances for 401(k), 403(b) and individual retirement accounts all reached record levels as of Dec. 31, 2021, also increasing over the prior quarter.
Worker contributions also increased, with more than one-third of 401(k) and 403(b) account holders putting more away in 2021. And more than 8 in 10 also had employers making contributions to their 401(k) plans, as well as 75% of those with 403(b) plans, with the average employer contribution reaching $4,080.
These findings come despite the “great resignation” that has characterized worker behavior over the last year. While Fidelity found “noteworthy shifts” in career changes across its customers, most workers who changed jobs did not cash out their savings account upon leaving, instead rolling their existing savings into a new plan with their employer, starting an individual retirement account or leaving their old account with their prior job untouched.
Many companies also offer auto-enrollment for new employees to participate in 401(k) plans and to contribute to those plans, which boosted participation.
Other findings from Fidelity include:
- Generation Z led growth in individual retirement account participation over 2021, with a 146% year-over-year increase in new total accounts.
- Women and younger workers were the top 401(k) savers in 2021, with one-third of women and 53% of Generation Z workers increasing their annual contributions in 2021.
- Employees are increasingly turning to experts for help and guidance on worker retirement account plans. Fidelity received 16.5 million calls from employees with defined benefits programs in 2021, as well as 366 million views to its online benefits portal, NetBenefits.
The year-end analysis reflects more than 35 million IRA, 401(k) and 403(b) accounts managed through Fidelity.
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.
