Retirement fund participants at Schwab are saving more and trading more to build their retirement accounts, according to Schwab first quarter report on a segment of its retirement accounts.
According to the Charles Schwab Self-Directed Brokerage Account (SDBA) Indicators Report, participants’ level of savings are up compared to the last quarter of 2023 and also compared to the first quarter of 2023.
The Indicators report is used as a benchmark on retirement plan participant investment activity within self-directed brokerage accounts, Schwab said in releasing the results. The average account balance for the first quarter was $328,239, an increase of nearly 10% year-over-year and a 5.8% increase from the fourth quarter of 2023, the report said.
“SBDA balances typically track with overall market performance,” Mike Ponce, managing director of Schwab Retirement Business Services, said in an email exchange. “The economy continued to show signs of improving in the first quarter and markets were up, which is reflected in participant balances.
“Account growth rates may fluctuate from quarter to quarter but balances trend higher over the long term as participants continue to prioritize the future,” Ponce added. “Asset allocations have remained balanced and haven’t changed meaningfully on a quarterly basis, showing that participants are disciplined when it comes to investing for their retirement.”
The accounts included in the report were brokerage accounts within workplace retirement plans, including 401(k)s and other types of retirement plans, that participants can use to invest retirement savings in individual stocks and bonds, as well as exchange-traded funds (ETFs), mutual funds and other securities that are not part of their retirement plan's core investment offerings, Schwab explained.
The SDBA Indicators Report includes data collected from approximately 286,000 retirement plan participants who currently have balances between $5,000 and $10 million in their Schwab.
Retirement plan participants who had financial advisors held substantially higher account balances on average at $526,997, compared to average account sizes for participants without an advisor, which were $286,431.
The report also showed that baby boomers had the highest account balances at an average of $531,201, followed by Gen X at $318,481 and millennials at $119,278.
Trading volumes averaged 12.3 trades per account compared to 9.7 trades per account in the fourth quarter of 2023 and similar to trading volumes from the first quarter of 2023.
Overall, participant holdings in the first quarter of 2024 were similar to the fourth quarter of 2023, with equities remaining the largest holding at 34.1%. The largest equity sector holding was information technology and the top equity holdings remained Apple, Nvidia, Amazon, Tesla and Microsoft.