Disciplined retirement planning paid off for Fidelity account owners in the third quarter — and presumably for retirement savers nationwide, regardless of where their accounts are held. Average retirement savings balances are way up.
Savers notched those gains despite market volatility and political turmoil.
The number of 401(k) millionaires and IRA millionaires also jumped.
The increase in savings was driven by a market that notched hefty gains amid all of the trading noise and up and down action in stock prices. The boost in balances was also due to investor perseverance, as savings account owners continued to make contributions despite distractions and uncertainty.
Retirement Planning: 401(k), IRA Savers Were Rewarded In Q3
Sometimes, solid retirement planning just means positioning yourself to benefit from a rising market. That's what happened in the third quarter.
The broad market in the form of the S&P 500 jumped 8.5%. That was its best third-quarter gain since 2010.
The average balance in a 401(k) account overseen by Fidelity hit $109,600. That was up from $104,400 a quarter earlier.
It was also up from $105,200 a year earlier, at the end of the third quarter in 2019. And it was nearly double the $65,800 average from a decade ago, at the end of the third quarter in 2010.
The record quarterly balance for 401(k) accounts at Fidelity was $112,300. That was set in the fourth quarter of 2019.
IRA Savers Reached A New Record Average Balance
Disciplined retirement planning also paid off for IRA owners.
Balances in IRAs held at Fidelity also climbed in the third quarter. The new quarterly average balance set a record: $117,700. That surpassed the old record of $115,400. That was set in the quarter that ended last Dec. 31.
The new quarterly IRA record balance was up from $111,500 at the end of the second quarter 2020.
It was an increase from the $110,200 average IRA balance at the end of the third quarter in 2019. And it was almost twice as high as the $67,200 average balance from 10 years ago, as of Sept. 30, 2010.
Apex Of Retirement Planning: New Highs In 401(k) Millionaires, IRA Millionaires
Average retirement savings balances were not the only indicator of retirement planning success. The ranks of 401(k) and IRA millionaires also swelled.
Fidelity 401(k) account owners whose quarter ending balances were $1 million or better hit a record 262,000, as of Sept. 30. That was up 17% from the 224,000 401(k) millionaires at the end of 2020's second quarter. It was also up 31% over the number from a year earlier, at the end of 2019's third quarter.
Similarly, the number of Fidelity IRA millionaires his 234,000. That was up nearly 15% from the 204,000 IRA millionaires as of the end of the second quarter.
And it was up almost 29% from the year-earlier total of 182,000.
Both previous records for the number of 401(k) and IRA millionaires were reached in 2019's fourth quarter.
That old record for 401(k) millionaires was 233,000.
The old record for IRA millionaires was 208,000.
This article originally appeared on Investor's Business Daily.
