PROVIDENCE – Despite the economic downturn ushered in by the new coronavirus, workers continued to grow their retirement savings accounts in the second quarter, according to a new report by Fidelity Investments Inc.
The company’s second-quarter retirement analysis showed average account IRA, 401(k) and 403(b) balances all increased between 13% and 17% over the first quarter, though only 403(b) balances were higher than a year ago. Growing balances reflected increasing or matching contributions from both employers and workers, with more than three-quarters of workers benefiting from an employer match in the second quarter.
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Other key highlights from the report include:
- Just under 90% of workers also contributed to 401(k)s in the second quarter, with 9% actually increasing their contribution rate and less than 1% stopping saving.
- Millennials continue to increase their preference for Roth IRAS, with 36% year-over-year growth in the number of contributing accounts and a 50% increase in dollars contributed.
- While 98% of Fidelity employers adopted federal Coronavirus, Aid, Relief, and Economic Security Act provisions allowing employees to tap into savings for COVID-19-related financial needs, just 3% of workers did so during the second quarter.
The quarterly report reflects analysis from 23,000 corporate defined contribution plans and 18.6 million participants as of June 30.
Nancy Lavin is a staff writer for the PBN. Contact her at Lavin@PBN.com.
