Coronavirus changes when and why workers retire. FOX Business’ Gerri Willis and more.
A new report from Fidelity Investments shows that the toll of the coronavirus pandemic on the economy has not stopped Americans from growing their retirement accounts for jobs.
The average IRA balance increased compared to last quarter and last year to $ 111,500, according to Fidelity. The average balance of 401 (k) increased to $ 104,400, a jump of 14% compared to last quarter, but was 2% down compared to a year ago.
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“While the performance of the stock market in Q2 helped increase workplace balances for retirement accounts, employer contributions have also played an important role,” said Fidelity President of Workplace Investing Kevin Barry. “Nearly 90% of employers continued to make similar contributions to their employees over the last four years, despite the unsteady business landscape.”
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Pension account balances saw double-digit growth due to a surprisingly healthy stock market despite the pandemic’s effect on economic uncertainty, according to Fidelity.
The CARES Act signed in March allowed individuals to save their pensions without paying a fine to cover essential needs, but only 3% of eligible workers used the CARES Act to withdraw from a pension account .
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Younger savers also opened a growing number of IRA accounts in the second quarter despite market volatility. The number of millennial IRA accounts grew 23% year over year, according to Fidelity.
Roughly a quarter of Americans “do not have a retirement savings plan or pension though,” according to a 2018 Federal Reserve report based on data.
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