The number of Americans with $1 million or more in their 401(k) accounts has reached record levels, according to Fidelity Investments.
The number of people with $1 million or more in their 401(k) increased to a record 196,000, up from 180,000 at the end of the first quarter, while the number of IRA millionaires increased to 179,700, also a record high and an increase from 168,100 last quarter, the company reported on Wednesday.
Fidelity’s 2019 Retirement Analysis showed the average 401(k) balance rose to $106,000, a 2% increase from $103,700 in the first quarter of 2019. The year-over-year average balance is also up roughly 2% from $104,000 in the second quarter of 2018.
The average IRA balance also jumped 2% to $110,400 from last quarter, and 3% higher than the $106,900 balance one year ago. And the average 403(b)/tax exempt account balance increased to $88,600, a 3% increase from last quarter and up 6% from the second quarter of 2018.
Fidelity also said the average employee contribution rate also reached a record-level of 8.8% in the second quarter, nearly a full percentage point higher than 10 years ago. Additionally, 32% of savers increased their contribution rate in the second quarter, the highest quarterly percentage ever and nearly three times the 11% of savers that increased their contribution rate in second quarter of 2009.
A separate retirement savings report by Bankrate.com differs somewhat from Fidelity’s findings. It found that while many Americans are holding their retirement contributions steady in 2019 and that the actual rate of savings are not increasing.
The Bankrate’s August Financial Security Poll found that 29% of Americans have increased their retirement savings contributions compared to last year and 16% are saving less. Meanwhile, 46% of working Americans say they are saving the same amount as last year.
The highest income households ($75K or more) were twice as likely as the lowest income households ($30K or less) to have increased contributions this year (41% versus 20%), Bankrate said.
It added that the lowest earners are more than four times as likely as the highest earners to be saving less for retirement this year (26% versus 6%). Another one in 10 of the lowest income households didn’t save anything for retirement last year or this year, Bankrate said.
It further noted that millennials are the most likely to say they want to increase their retirement contributions.