The current environment of stagnant wages and higher living expenses is not ideal for Americans trying to save for their golden years. A rally in stocks this year has boosted retirement plans, but many are still struggling and not placing enough money aside for retirement.
At the end of the second quarter, the average 401k balance was $80,600, up almost 11 percent from $72,800 in the same quarter last year, according to Fidelity Investments’s latest quarterly analysis. The average balance rose 19 percent from a year earlier to $211,800 for employees who were continuously employed and participated in a 401k plan over the past decade.
“While it’s a good sign that some workers are increasing their savings for retirement, many younger workers — especially Millennials — aren’t saving at the recommended 10 to 15 percent of their income,” James MacDonald, president of workplace investing at Fidelity Investments, said in the report. “It is critical young workers realize that even the smallest increase to their monthly savings today or just 1 percent — whether in a 401k or an IRA — could have a meaningful impact on their retirement paycheck down the road.”