Despite surging COVID-19 cases and climbing inflation, Americans' retirement account balances continue to rise to record levels. Others, though, are fighting to pay rent — unable even to think about investing for the future.
Let's look at the haves who are saving for retirement in workplace plans.
Fidelity Investments just released its quarterly analysis of more than 30 million 401(k) and 403(b) retirement accounts. Average retirement account balances maintained an upward trend for the third straight quarter.
Workers who continue to contribute to their plans, even as the pandemic produced some heart-clutching moments in the stock market, were rewarded with significant increases in their account balances, according to Fidelity, the largest administrator of workplace retirement accounts.
In fact, as the pandemic caused people to lose their jobs, 38% of 401(k) savers increased their savings rate. And this wasn't just among older workers, who you might expect would contribute more as they get closer to retirement.
"People are really seeing the benefit of long-term investing," said Jessica Macdonald, vice president for thought leadership at Fidelity.
Macdonald said 85% of the growth in account balances came from stock market performance.
The average 401(k) balance increased to a high of $129,300 in the second quarter of 2021, up 24% from the same period a year ago. The average 403(b) account balance increased to a record $113,300, also up 24%. The average IRA balance was $134,900, a 21% jump.