‘Barron’s Roundtable’ discusses reports that members of Gen Z are aggressive about wanting to retire.
Generation X has been ramping up its efforts to build nest eggs for retirement, according to newly released data from Fidelity Investments.
The financial services company reported Thursday in its third-quarter retirement analysis that Gen Xers paying into individual retirement accounts (IRAs) increased the amount of their contributions by 35% from the same period in 2023.
It considered Gen X as people born in the year 1965 to 1980.
Senior couple calculates bills to pay, looks at household finances, family management for seniors, planning budget, expenses, gray-haired man and woman read bank loan documents at home. (Stock / Stock)
Compared to last year, more Gen Xers reinvested in their IRA accounts in the third quarter, according to Fidelity. That jump was 23%.
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The financial services company said in a press release that Gen X has made “dramatic gains across all retirement accounts” including IRAs, 401(k)s and 403(b)s.
When it comes to Gen Xers who have been playing the long game and putting money away in 401(k) plans every 15 years, there was a 6% quarter-over-quarter increase in their average account balance. to $586,100, per Fidelity data.
“We are pleased to see Gen-X retirees continue to make strong returns on their retirement savings,” Fidelity Wealth President Roger Stiles said in a statement. “The oldest members of this generation will be retiring in the next five to ten years, making this an ideal time to focus on securing a nest egg that will help them live comfortably through their retirement years.”
This comes as Fidelity found that people saving their golden years overall “experienced another quarter of growth due to continued strong donation levels, and favorable market conditions.” Its analysis includes more than 49 million retirement accounts.
Two types of retirement plans — 401(k)s and 403(b)s — marked their “highest average on record” balances in the third quarter, the financial services firm said.
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For 401(k) accounts, balances reached $132,300 in the third quarter, a quarter-over-quarter increase of 4% and a year-over-year increase of 23%, according to Fidelity.
Some young Americans are choosing “microretirement” early in their careers rather than saving for their permanent retirement later in life. (Getty Images / Getty Images)
Estimated amounts in 403(b) plans did not rise as much, reaching $119,300.
During that time, the average balance of IRAs came in at $129,200 per quarter.
Fidelity’s retirement analysis reported the average savings rate in the third quarter as “sustainable.” It put it at 14.1%, just shy of the company’s recommended 15%.
“Consistent retirement contributions throughout various market cycles are important, but despite market volatility, maintaining this commitment over time is what will help set Americans up for a future of financial well-being and security,” said Fidelity Investments President of Workplace Investing. in the statement.
AMERICANS EXPRESS THEIR BIGGEST FINANCIAL REGRETS ABOUT POTENTIAL RETIREMENT
Earlier this year, Northwestern Mutual said Americans think $1.46 million is the amount of money they need to have to “comfortably” retire.
A person puts money into a retirement savings pot. (iStock / Stock)
About 57% of working Americans reported that they think they are behind when it comes to saving for retirement, a separate Bankrate survey published in late September found. On the other hand, 15% expressed that they are “much better” or “a little ahead of where you should be” about it.
Another 22% believe they are “doing well,” according to Bankrate.
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