The COVID-19 epidemic has caused us to rethink many parts of daily existence, such as our health, jobs, where we live, our financial future, education, travel, and simple handshake. But according to data released on Tuesday, many savers are still financially on the path to retirement.
A combination of a strong market, epidemic-related stimulus opportunities and stable, disciplined investment in the second quarter led to fidelity investment to optimism. The firm, which publishes its analysis on the retirement trends of investors and employers every quarter, found double-digit growth in 401 (k) plans and individual retirement accounts.
The firm also said that 11% of employers reduced or terminated their employer matches for retirement plans, and a third of them said they would reinstate it within the next year (another half said they would do so soon Will be possible financially). The average employer’s contribution was $ 1,080 in the second quarter of the year – nearly three-quarters of the workers received.
See: How important it is for you to retire – and how COVID-19 will replace it
Retirement savers did not stop saving, Fidelity found. Nearly nine of the 10 401 (k) account holders (88%) were contributing to their accounts during the second quarter, limited to April, May and June. Among them, 9% increased their contribution rates. Of the 403 (b) account holders, almost all (96%) maintained or increased their contribution rates during the same month.
The average 401 (k) balance in the second quarter was $ 104,400, up 14% from the first quarter but down 2% from the same time last year. The average 403 (b) account balance was $ 91,100, a 17% increase from the previous quarter and an increase of 3% from a year earlier. The average personal retirement account was $ 111,500, a 13% increase from the first quarter and slightly more than the average $ 110,400 at the same time last year.
See more: Is Suze Orman correct? Is a traditional IRA really the wrong way to invest for retirement?
Millennials continue to favor Roth IRA accounts, which are funded with after-tax dollars, but can be tax-exempt. This generation created 23% more IRA accounts in the second quarter of 2020. Roth Ira notably reported a 36% year-over-year increase (with a 50% increase in contributions).
Read: Roth Strategy We Want We Built for Early Retirement
Not all retirement savers can be optimistic. The epidemic has forced millions of Americans out of work, some of whom are nearing retirement age and not yet well enough to retire. The Tax Act, passed in March, allowed savers to withdraw more than usual amounts from their retirement accounts, although financial advisors urge consumers to think carefully before doing so.