Home Career 401(k) balances down 23% year-over-year due to market volatility: Fidelity

401(k) balances down 23% year-over-year due to market volatility: Fidelity


Months of market volatility have taken a serious toll on retirees.

Average 401(k) According to a new report from Fidelity Investments, the nation’s largest provider of 401(k) plans, the balance declined for the third straight quarter and is now down 23% from last year to $97,200. The financial services firm serves a total of more than 35 million retirement accounts.

In the third quarter of 2022, the average individual retirement account balance also fell 25% year-over-year to $101,900.

Still, most retirement savers continue to contribute, Fidelity found. The average 401(k) contribution rate, including employer and employee contributions, remained steady at 13.9%, just below Fidelity’s suggested savings rate of 15%.

“This year has seen a dramatic turnaround in the market,” Kevin Barry, president of Fidelity’s workplace investing division, said in a statement. “Pension savers wisely chose to avoid the drama.”

“One of the most essential aspects of a smart retirement savings strategy is to contribute consistently enough — in up, down and sideways markets — to help you achieve your goals,” Barry said.

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Only 4.5% of savers changed their asset allocation in the last quarter, with most moving their savings to a more conservative investment option, according to Fidelity. Some pension savers seem to have been scared after heavy losses amid worries about inflation, interest rates, geopolitical turmoil and other factors, 401(k) administrator Alight Solutions also found.

“It’s best to take a long-term approach to retirement”

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