Balances in 401(k)s and IRAs have reached record highs, according to new data from Fidelity. But that may not mean much for your retirement.
The average 401(k) balance at the end of the first quarter was $91,800, up 0.5 percent from last quarter's then-record numbers and up 3.6 percent from a year ago, according to the analysis by Fidelity, the nation's largest provider of 401(k)s. Among employees participating in a 401(k) for at least 10 years, the average balance hit $251,600, up 12 percent from a year ago.
IRA balances also reached a record, with Fidelity reporting that the average Q1-ending balance was $94,100, up 5 percent from last quarter. Among consumers who have both a 401(k) and IRA, combined balances average $267,200, up 2.2 percent from last year.
Much of the increase stemmed from more consumers saving for retirement, and boosting their contributions. More than 1 million workers raised their contribution rate during the first quarter, according to Fidelity. The average contribution rate remained at 8.1 percent of employees' salaries, a record set during the fourth quarter, while employer contributions climbed from 4.1 percent in the previous quarter to 4.4 percent.