Gen Z workers who are saving for retirement saw their 401(k) contributions grow faster than millennials last quarter, while Gen X outperformed baby boomers at the other end: according to Fidelity.
After analyzing 23.3 million 401(k) participants at the end of the first quarter, Fidelity said Thursday that the average balance for Gen Z increased 15% from the fourth quarter to $11,300, compared with an 11% increase to 59,800 US dollars for millennials. .
Across all generations, the average balance rose 6% to $125,900. This suggests that Gen X’s average balance of $178,500 and Boomers’ $241,200 did not grow as quickly as younger cohorts.
Given that younger workers tend to invest more aggressively and older workers approaching retirement become more conservative, such generational differences should not be surprising.
But typical generational investment profiles may be changing, as separate studies have found that younger Americans are particularly looking to retire early, with most millennials aiming for $1 million to $2 million in savings and Gen Z aiming for $500,000 to $1 million.
“We are encouraged to see account balances increasing, which is strong evidence that retirement savers are continuing to invest and continue to make consistent contributions while seeing financial benefits,” said Sharon Brovelli, president of workplace investing at Fidelity Investments. , in his report. report. “With continued participation across generations and income levels, retirement savers will continue to build a better financial future, which is critical to the financial health of many Americans and our economy.”
Fidelity data also showed that Gen X has reached a key milestone as retirement approaches for the generation while more boomers move into their golden years.
Among long-term savers who maintained the same 401(k) accounts for at least 15 years, the average Gen X balance ($543,400) exceeded the average for Boomers ($543,200) for the first time.
This marks an important inflection point as Generation X prepares to retire soon and save more, unlike boomers who are already spending their savings after leaving work.
But again, typical savings models may not apply to the current group of retirees, as many boomers are turning to “retirement plans” to stay active and avoid depression by working well into their 60s and even 70s.
Meanwhile, Fidelity said it created 485,000 401(k) millionaires in the first quarter, up 15% from the previous quarter and 43% from a year ago.
That’s despite the topsy-turvy start to the year that financial markets have seen, with stocks and bonds selling off amid growing doubts that the Federal Reserve will soon begin cutting rates. Of course, Fidelity 401(k) millionaires have been in it for a long time, saving for an average of 26 years with an average contribution rate of 17%.
The average balance was $1.58 million, down from $1.55 million in the fourth quarter, a Fidelity spokesman said. CNN.