For Mark Roberts’ Use: In recent years, many Americans have expressed concerns over their eventual retirements. They worry that they started saving too late, that their retirement accounts aren’t performing as hoped, or that the rising cost of living will prevent them from retiring at all. These are valid concerns, but luckily we are seeing some evidence that offers a bit more optimism.
According to data from Employee Benefit News*, average retirement account balances are indeed growing! Marked change has been recorded since 2012, reflecting perhaps a combination of factors that will aid Baby Boomers hoping to retire in the near future. First, let’s take a look at the data.
Average retirement account balances were tracked in 2012, then again in 2016 and 2017. For 401k plans, average balances were recorded as following:
- In 2012, the average 401k balance was $73,300
- In 2016, the average 401k balance was $89,100
- In 2017, the average 401k balance was $97,700
IRA balances showed a similar trend:
- In 2012, the average IRA balance was $73,100
- In 2016, the average IRA balance was $89,600
- In 2017, the average IRA balance was $100,200
Why the growth in retirement funds? It’s likely that more than one factor is contributing to this upward trend. First, we’ve noticed improved stock market performance in recent years, which would obviously contribute to growth depending upon how each individual manages their fund.
However, the study’s analysts also discovered that workers increased their savings rate during this time, and that employer contributions grew as well. Each individual’s situation is different, of course, but these figures underline the significant difference one can make to their own retirement savings, by following a few key steps. Increase your savings a bit each year, particularly if you receive a raise or bonus, and endeavor to reach your employer’s matching contribution amount.
So, how does your own situation compare? Are you feeling more confident about retirement? For more information on planning for your own future, give us a call. We can discuss you individual needs and help you adjust your savings strategy, if needed.
*Employee Benefit News, August 3, 2017