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The U.S. economy has been severely impacted by the coronavirus, and Americans’ retirement savings haven’t been immune.
Last week, Fidelity Investments released the results of its analysis of retirement savings trends for the first quarter of 2020.
The financial services company analyzed more than 30 million 401(k), IRA and 403(b) retirement accounts, according to the report.
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Ultimately, the coronavirus-led economic downturn did lead Americans’ retirement savings to drop, Fidelity found.
According to the report, the average 401(k) account balance had $91,400 during the first quarter, while the average IRA had $98,900 and the average 403(b) had $75,700.
For the average 401(k), that was a drop of 19 percent from the record high of $112,300 last quarter. Meanwhile, the average IRA balance dropped 14 percent from last quarter and the average 403(b) balance dropped by 19 percent from last quarter.
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“Given the unprecedented market volatility this quarter, it’s not surprising that account balances were impacted, although declines were less than the overall market decline,” Kevin Barry, Fidelity’s president of Workplace Investing, said in a statement. “It was encouraging to see that many investors stayed the course and did not make drastic changes to their asset allocations, with some investors increasing contributions to their retirement accounts.”
“However, we know that investors continue to be concerned about how the economic environment and global pandemic may impact their health and financial futures, and we are already seeing the impact of the market downturn on our clients,” Barry added.
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Aside from the average balance in Americans’ retirement accounts, Fidelity also found that most people maintained their retirement contributions -- with some savers increasing their contribution despite the uncertain market.
According to the report, 15 percent of 401(k) savers increased their contribution rate in the first quarter. There was also a 10 percent increase of average IRA contributions in the first quarter of 2020 compared to the first quarter of 2019.
Fidelity also found that more than 407,000 IRA accounts were opened in the first quarter of 2020, which is 36 percent more accounts than were opened in 2019 during the same period.
Millennials are particularly focused on IRAs, according to Fidelity, which found “contributions among millennials increasing 41 percent over the last year, while the amount contributed by millennials increased 64 percent,” the report said.
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