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Fidelity® Releases Quarterly Snapshot On 401(k)s Showing Average Savings Inched Higher in 2011BOSTON – Fidelity Investments® today released its latest data1 on 401(k) savings and behaviors which showed that the average employee contribution rose slightly in 2011 to $5,750, up from $5,680 a year ago, as participants on average continued to save more than 8 percent2 of their annual salaries. As of the end of the fourth quarter 2011, the average 401(k) balance was $69,100, up nearly 8 percent from the end of the third quarter3.
“It’s very encouraging that savings levels actually held up during the intense market volatility of last year and a sluggish economic environment,” said James M. MacDonald, president, Workplace Investing, Fidelity Investments. “Increases in savings levels, however small, can make a significant impact over time.”
This snapshot into Fidelity’s 401(k) savings is based on the company’s 11.6 million 401(k) participant accounts, the largest in the industry4.
Additional key metrics from the fourth quarter 2011 and full year include:
• More participants benefited from employer contributions: Eighty-two percent of active participants received employer contributions – typically a company match or profit sharing – during 2011, up from 79 percent in 2010. Seventy-five percent of employers made contributions to eligible participants last year, averaging $3,270, up from $3,170 the year before.
• Target date funds helped drive improved diversification and asset allocation: One-in-four participants invested 100 percent of their 401(k) assets in this option, with nearly half of participants age 35 or younger investing all their plan assets in the option. Diversified , age-based target date funds, such as Fidelity Freedom Funds®6, remain extremely popular with 98 percent of plans now offering such options. Of participants who were in a plan for 10 years7 and took on more risk8 in their investment portfolio than their applicable age-based Freedom Fund, 62 percent underperformed9 the Fund over the time period10.
• Very few participants made exchanges last year: Only one in ten participants made an exchange – the transfer of money from one investment option to another – during a year of significant market volatility, down from 15 percent in 2006. Much of the reduction in exchanges may be attributed to the increased use of target date funds and an appreciation of a long-term, steady approach to retirement saving. Over the past few quarters, when investors made exchanges, more assets moved out of equities toward conservative holdings such as short term, stable value and fixed income options.
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Media-ready infographic about contribution levels available to download
To download a graphic on the growth of 401(k) participant and employer contributions, click: http://go.fidelity.com/401kfacts
About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $3.4 trillion, including managed assets of $1.5 trillion, as of December 31, 2011. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.
1 All Fidelity business data as of December 31, 2011 unless otherwise stated.