Gen X Boosts Retirement Savings Efforts
Generation X has been intensifying its efforts to build retirement nest eggs, as indicated by newly released data from Fidelity Investments.
The financial services company reported in its third-quarter retirement analysis that Gen Xers saving in individual retirement accounts (IRAs) increased their total contributions by 35% from the same period in 2023.
Fidelity defines Gen X as people born between 1965 and 1980.
Compared to a year ago, more Gen Xers also contributed to their IRA accounts in the third quarter, with a 23% increase.
Impressive Gains Across Retirement Accounts
Fidelity stated that Gen X made notable gains across all retirement accounts, including IRAs, 401(k)s, and 403(b)s.
For Gen Xers who have consistently contributed to 401(k) plans for the past 15 years, there was a 6% quarter-over-quarter increase in their average account balance to $586,100, according to Fidelity’s data.
We are pleased to see Gen-X retirement savers continue to make solid gains with their retirement savings. The oldest members of this generation will be approaching retirement in the next five to ten years, making this the perfect time to focus on securing a nest egg that can help them live more comfortably throughout their retirement years.
Overall Retirement Savings Trends
This development occurs as Fidelity found that overall retirement savers experienced another quarter of growth due to strong contribution levels and positive market conditions. The analysis covered over 49 million retirement accounts.
Two types of retirement plans—401(k)s and 403(b)s—reached their highest average balances on record in the third quarter.
For 401(k) accounts, balances averaged $132,300 in the third quarter, a 4% quarter-over-quarter increase and a 23% year-over-year increase, per Fidelity.
Average balances in 403(b) plans showed similar increases, reaching $119,300.
Meanwhile, the average balance for IRAs was $129,200 for the quarter.
Fidelity’s retirement analysis reported that the total average savings rate in the third quarter remained steady at 14.1%, just below the company’s recommended 15%.
Consistent retirement contributions during various market cycles is important, but despite what happens in the market, maintaining this commitment in the long run is what will help set Americans up for a future of financial wellness and security.
Additional Insights on Retirement Perceptions
Earlier this year, Northwestern Mutual reported that Americans think $1.46 million is the amount needed to retire comfortably.
About 57% of working Americans reported feeling behind on saving for retirement, according to a separate Bankrate survey published in late September. In contrast, 15% said they were significantly or slightly ahead, and another 22% believed they were right on track, per Bankrate.
