Employee retirement savings hit record high

More focus from workers and employers—including auto-enrollment—helps boost 401(k) accounts.
By: | August 26, 2019 • 3 min read

Employees are socking away more in their retirement accounts than ever, a new analysis finds—a strong indicator of headway from both workers and their employers.

Nearly a third of 401(k) savers increased their savings rate last quarter, according to new data out last week from Fidelity Investments. The average 401(k) contribution rate is now 8.8%, not including the employer match. That’s nearly a full percentage point higher than a decade ago and the highest percentage ever. On top of that, employers are on average contributing another 4.7%, bringing the total contribution to 13.5%. The analysis is based on data from the more than 30 million 401(k) accounts administered by Fidelity Investments.

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The increase is a “great indication of how focused Americans are getting about saving for retirement,” says Kevin Barry, president of workplace investing at Fidelity, noting that increasing contribution rates by even 1% can make “a big difference” in employees’ long-term retirement savings.


“What may seem like a small amount today can have a significant impact on your account balance in 10 or 20 years,” he says.

Among participants who have been in their 401(k) plan for 10 years straight, the average balance reached $305,900, more than five times the average balance of $59,900 for the same group 10 years ago.

Meanwhile, the number of Fidelity 401(k) plans with a balance of $1 million or more jumped to a record 196,000 as of June 30, up 17% from 168,000 last year.

Increased employer focus on employee savings is also having a big impact. In part spurred by dismal reports about employee retirement savings, more employers have stepped up financial wellness efforts in order to help workers save for their post-work years while also paying off loans and saving for expenses.

“There has been a huge focus from many employers to provide financial education to their employees across a broad spectrum of topics including budgeting, debt reduction and healthcare costs,” says Meghan Murphy, a vice president at Fidelity Investments, adding that she’s encouraged by the increase in contributions.

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Auto-enrolling employees in a company’s 401(k) is also helping increase savings. It’s a strategy that should be embraced more by employers, Murphy says.