Gen X helps drive retirement savings balances to new record

Generation X has been boosting its efforts to build nest eggs for retirement, according to the newly-released data from Fidelity Investments. 

The financial services company reported Thursday in its third-quarter retirement analysis that Gen Xers socking away money in individual retirement accounts (IRAs) upped their total contributions by a whopping 35% from the same period in 2023. 

It considered Gen X to be people born in the years 1965 through 1980.

Compared to a year ago, more Gen Xers also put money into their IRA accounts in the third quarter, according to Fidelity. That jump was 23%. 

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The financial services company said in a press release that Gen X made "impressive gains across all retirement accounts" including IRAs, 401(k)s and 403(b)s. 

When it came to Gen Xers that have been playing the long-game and setting aside money in 401(k) plans on a regular basis for the past 15 years, there was a 6% quarter-over-quarter increase in their average account balance to $586,100, per Fidelity’s data. 

"We are pleased to see Gen-X retirement savers continue to make solid gains with their retirement savings," President of Fidelity Wealth Roger Stiles said in a statement. "The oldest members of this generation will be approaching retirement in the next five to ten years, making this the perfect time to focus on securing a nest egg that can help them live more comfortably throughout their retirement years."

This comes as Fidelity found that people saving up for their golden years overall "experienced another quarter of growth thanks to continuing strong contribution levels, and positive market conditions." Its analysis included over 49 million retirement accounts.

Two types of retirement plans – 401(k)s and 403(b)s – notched their "highest average on record" for balances in the third quarter, the financial services company said. 

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For 401(k) accounts, balances averaged $132,300 in the third quarter, a quarter-over-quarter increase of 4% and a year-over-year increase of 23%, according to Fidelity. 

Average balances in 403(b) plans notched similar increases, hitting $119,300.

Meanwhile, the average balance for IRAs came in at $129,200 for the quarter.

Fidelity’s retirement analysis reported the total average savings rate in the third quarter "held steady." It pegged it at 14.1%, just shy of the 15% the company recommends. 

"Consistent retirement contributions during various market cycles is important, but despite what happens in the market, maintaining this commitment in the long run is what will help set Americans up for a future of financial wellness and security," Fidelity Investments President of Workplace Investing said in a statement.

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Earlier this year, Northwestern Mutual said Americans think $1.46 million is the amount of money they must have in order to "comfortably" retire.

About 57% of working Americans reported thinking they were on the backfoot when it came to socking away money for retirement, a separate Bankrate survey published in late September found. On the other hand, 15% expressed they were "significantly" or "slightly ahead of where you should be" for it.

Another 22% believed they were "right on track," per Bankrate.