Average 401(k), IRA balances hit record highs
Retirement account balances rose in the second quarter amid market gains, according to Fidelity. At the same time, more savers tapped their accounts for cash.
TL;DR
- Average 401(k) balances hit a record $155,800 in Q2, up 13.1% year-over-year.
- Average IRA balances also reached a record $144,523 in Q2, up 10% from a year ago.
- Rising market performance and a steady contribution rate of 14.4% buoyed account balances.
- The share of workers with outstanding 401(k) loans increased to 19.5%.
- Hardship withdrawals rose to 3% of workers, indicating financial strain.
- Experts attribute increased withdrawals to the affordability crunch caused by inflation and rising costs of necessities.
- Tapping retirement accounts can jeopardize long-term savings and compound interest.