https://www.yahoo.com/news/401-k-hit-records-workers-112754438.htmlNEW YORK (AP) — How's your 401(k) doing?
President Donald Trump likes to ask that question around the country, sometimes throwing out big gains like 90% or 95%. The average 401(k) did indeed hit a record last year, although its growth was considerably less than that.
The average 401(k) balance rose 17% last year to $112,300 from the end of 2018, according to a review of 17.3 million accounts by Fidelity Investments. The average individual retirement account, or IRA, balance rose the same percentage to $115,400
Comments
- Socking away more ? The balance increases reported don’t reflect that, since the S&P rose 31+% in 2019 (according to the article).
- Are these numbers for only Fidelity’s clients? Or are they referencing data for the total of all U.S. retirement savers? If only Fidelity, numbers may not be representative.
- Do the reported balances represent all retirement plans - or just those where the holder hasn’t yet retired? (Let’s hope it’s the former.)
- I contended a while back (some other thread) that worker contributions tend to increase when markets are richly valued. Fidelity’s observations might support that.
You noted: "- I contended a while back (some other thread) that worker contributions tend to increase when markets are richly valued. Fidelity’s observations might support that."
Based upon my observations regarding 401k/403b plan participants over many years; the participants have a chosen amount of money placed each pay period into their plan, regardless of what the markets are doing.
One may suspect there is a very small percentage (less than 5%) of these participants who actually pay attention to the markets. Those who do pay attention may alter some of their allocations periodically; but not likely the contribution amount, unless there is a change in their overall financial circumstance.
My inflation adjusted 2 cents worth
Catch