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Americans are still saving for retirement — and becoming 401(k) millionaires


Americans may be afraid to look at their retirement accounts thanks to stock market volatility, but many investors are still staying the course, according to Fidelity Investments’ most recent data released Thursday. 

The savings rate for 401(k) plans reached a record level of 14%, just one percentage point away from the recommended 15% Fidelity suggests to retirement savers, according to Fidelity’s 2022 first-quarter data of its participants. 

“We have more and more retirement savers not making changes based on short-term market events,” said Mike Shamrell, a Fidelity Investments spokesman. “They’re deciding to stay the course and taking a long-term approach.” 

The majority of savers also didn’t tinker with their asset allocation, and those who did were more likely to be older participants closer to retirement, Shamrell said. Of the 5.6% of 401(k) account holders who did make a change in the first quarter of 2022, most (82%) only made one change. Only 4.4% of 403(b) account holders made a change to their plans in the first quarter, and 87% of those who did made just one change. 

“People are starting to understand this is something that is going to occur and that trying to make changes based on these short-term events could have a negative impact on your long-term ability to save,” Shamrell said.

Retirement saving incentives in the workplace, such as automatic enrollment into retirement plans, may be one reason why fewer investors made asset allocation changes, Shamrell said. Many participants, especially younger workers, have their savings in a target-date fund, which ties its asset allocation to a specific year, such as 2055 or 2060. 

Not all savers may have seen the benefits of their increased savings rates, however. Retirement account balances declined from last quarter, or the same time last year. For example, the average 401(k) balance was $121,700 in the first quarter of 2022, down from $130,700 last quarter and $123,900 in the first quarter of 2021; IRA balances were $127,100 last quarter, down from $135,600 in the last quarter of 2021 and $130,000 from the 2021 first quarter. The average 403(b) balance was $107,600 in the first quarter of this year, down from $115,100 in the previous quarter but up $300 from the same time the year before. 

Still, a $1 million balance remains attainable — there were 406,00 401(k) millionaire account holders in the first quarter of 2022, and 346,800 IRA millionaires, Shamrell said.

Fewer workers took a loan from their 401(k) accounts, too. The number of people starting a new loan decreased for the third consecutive quarter – to just 2% in the first quarter — and the percentage of participants with an outstanding loan balance also dropped for the fourth consecutive quarter, to 16.6%. 

Consistency has proven to be key among Fidelity’s retirement plan participants. For people who have contributed to the same 401(k) plan for the last five years, the average balance grew from $115,000 in the first quarter of 2017 to $257,400 in 2022. Those who have been in the same plan for the last 10 years saw their balances grow from $85,100 in the first quarter of 2012 to $383,100 in 2022. And participants of the same plan for 15 years had an average account balance of $64,900 in the first quarter of 2007 to $482,900 in 2022. 

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