Fidelity Investments disclosed on Aug. 17 that their Q2 2023 retirement analysis showed a successive quarterly growth in retirement account balances. The analysis, encompassing over 45 million IRA, 401(k) and 403(b) retirement accounts, reported substantial growth in 401(k) balances, with a remarkable 66% increase among Gen Z workers compared to Q2 2022 and young investors also observed a 34.4% year-over-year surge in IRA accounts, according to a press release.
In the second quarter of 2023, the average 401(k) balance was $112,400, which was 4% higher than in the first quarter of 2023. Meanwhile, the average IRA balance was $113,800, which was 5% higher than in the previous quarter. Between the second quarters of 2022 and 2023, the average 401(k) balances of workers from all three generations increased by more than 10%. The average 401(k) balances of workers from Gen Z rose by 66%, those from Millennials rose by 24.5% and those from Gen X rose by 14.5%. According to the release, Boomer balances went up by 6.3% from the second quarter of 2022 to the third quarter of 2022.
"We are pleased to see a third straight quarter of positive gains for retirement savers as the market continues to improve and both employees and employers commit to establishing a strong financial future," said Kevin Barry, president of Workplace Investing at Fidelity Investments, in a press release.
When contributions from employees and employers were factored into the calculation, the savings rate for the second quarter came in at 13.9%, which was the same proportion as the savings rate recorded in the second quarter of 2022. There were 14.3 million IRA accounts as of the third quarter of 2022, representing an increase of 11% from the second quarter of 2022. Over the course of the previous year, savers who had a five, 10 or 15-year time horizon saw increases in their long-term savings of double digits on average. The press release for this quarter noted that although 401(k) loan balances went up somewhat, there was an increase in the number of retirees who became billionaires.