During this time of high inflation and increased interest rates, investors are understandably nervous about finances.
The number of people with negative feelings about finances has increased in the past year.
That’s according to the 3Q analysis of savings behaviors and account balances from Fidelity Investments.
The percentage of individuals feeling negative has increased to 32% in the past year and is greater than the 30% who have positive feelings.
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A year ago, 45% felt positive, which was twice the percentage of those with negative feelings.
Investors have stayed strong about retirement savings despite balances slipping.
Average retirement account balances decreased for the third consecutive quarter.
The average 401(k) balance dropped below the six-figure mark to $97,200 this quarter, down 22.9% from a year ago, 6% from Q2 2022, and a 28% increase from ten years ago.
The average IRA balance was $101,900 in Q3, a 24.9% decrease from Q3 2021, an 8% decrease from last quarter, and a 33% increase from ten years ago.
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The recent analysis revealed some silver linings.
Although average account balances have decreased, the data suggests retirement savers have kept their eyes on the prize and stayed strong on their retirement goals.
The number of IRAs on Fidelity’s platform continued to increase, and the percentage of employees with 401(k) loans remained low for a sixth consecutive quarter.
“The market has taken some dramatic turns this year, including the best month this past October since 1976,” said Kevin Barry, president of Workplace Investing at Fidelity Investments. “Retirement savers have wisely chosen to avoid the drama and continue making smart choices for the long-term.”
While people continue to investment in their retirement accounts, their savings rates have slipped somewhat.
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The combination of employer and employee 401(k) contributions, remained fairly steady at 13.8%, but below the percentages in the two prior quarters and is just below Fidelity’s suggested savings rate of 15%.
Fidelity Investments is America’s No. 1 IRA provider with 35 million IRA, 401(k), and 403(b) retirement accounts.
Source: https://finance.yahoo.com/news/average-401-k-balances-drop-053021694.html