It looks now is a good time as any to start saving for retirement. In fact, if you have a 401(k) account, you will be very happy to know that the average account balance reached a record high, this quarter (Q3), at $106,500.
This is actually just one of a few positive notes that Fidelity Investments posted in its most recent quarterly analyses of retirement savings trends. At least, it is definitely a good thing for the 30 million people who have either a 401(k) or IRA account.
Looking more closely at the data, the record balances for workers who have a 401(k) account saw a bump of more than 6 percent from the same period last year, topping the previous record balance of $104,300, which was posted during the fourth quarter, last year. As a matter of fact, account balances at the close of September reached an average nearly double that of the Q3 in 2008, at the center of the financial crisis. At that time, the average 401(k) balance was $56,900.
In addition to this positive outlook, the average IRA balance also made some ground. The numbers more than doubled from Q3 2008, from $52,000 to $111,000.
Those who chose a 401(k) plan as a means to save more money over time will appreciate other benefits that have increased lately. For one, employers often place workers who do not choose a specific investment type into “default” investment groups like target-date funds. Target-date funds have become increasingly popular over the years because they have an aggressive mix of assets—that help younger investors earn more—early on and evolve to conservative options as an investor/worker nears retirement.
On the other hand, if you have chosen the stock market as the core of your investment portfolio, you are going to want to know that the market has become quite volatile in fourth quarter 2018. Actually, in October, the US benchmark stock index—the Standard & Poor’s 500 (S&P) fell into a correction, though only briefly. This is defined by a 10-percent drop from a prior high. As we enter the new week, the S&P was down more than 7 percent from this high note.