Fidelity Q2 2016 Retirement Analysis

401(k) Balances Improve While Percentage of “Do It for Me” Investors Hits Record Levels

Balances up despite market volatility

August 03, 2016 — BOSTON–(BUSINESS WIRE)–Fidelity Investments® today released its 401(k) and Individual Retirement Account (IRA) analysis1 for the second quarter of 2016, which reveals:

• Account balances are up despite market volatility.

The average 401(k) balance increased almost 2 percent from the end of Q1, but fell 2.5 percent year-over-year. The average IRA balance increased slightly from the end of Q1, but was 7 percent lower year-over-year.


Average Balances





Q2 2016



Q1 2016



Q2 2015





























• A record number of 401(k) investors using target date funds and managed accounts. The percentage of Fidelity customers with all of their 401(k) assets in a target date fund or managed account topped 45 percent at the end of Q2. These investors were less likely to react to market swings and economic events – among savers with all of their 401(k) savings in a target date fund, only 1 percent made an investment change within their 401(k) over the past 12 months, compared to 13 percent of 401(k) investors taking a “do it yourself” approach to retirement savings.

• People turn to new tools to help improve their financial outlook beyond retirement. More than 400,000 people tapped Fidelity’s online guidance for information on a wide range of financial topics, including how to increase their savings, establish an emergency fund and details on Social Security benefits. In addition, more than 225,000 people completed Fidelity’s interactive money checkup that analyzes a person’s financial needs and provides guidance.

• Balances for long-term Millennial2 401(k) savers reached record levels. The average balance for Millennials who have been continuously active3 in their 401(k) plan for 10 years reached a record $92,900 at the end of Q2, an increase of nearly 10 percent from $84,700 one year ago. The overall balance for long-term savers reached $241,300 at the end of Q2, up from $231,500 one year ago.

“Most retirement savers are accustomed to market volatility, but the swings in the second quarter were especially dramatic, including a 600-point drop followed by a nearly 800 point increase,” said Doug Fisher, senior vice president, Workplace Investing, Fidelity Investments. “It can be tempting for investors to have a knee-jerk reaction to market volatility, so it’s encouraging that more people are tapping professional guidance to help keep their retirement savings and investing on track.”

Most retirement savers are accustomed to market volatility, but the swings in the second quarter were especially dramatic

A Declining Stock Market (and Regular Savings) Might Actually Help Your Retirement

Stock market declines are thought to have a negative impact on retirement savings balances, but they can sometimes help people accumulate more in their retirement accounts.

The investment strategy known as “dollar cost averaging” can help people who contribute the same amount on a regular schedule to their 401(k) or IRA.

When the stock market declines, the price of many investment options can be lower, so more shares can be bought than when prices are high. As a result, declining stock prices can sometimes help individuals increase their retirement savings in the long run, when prices eventually rise. However, dollar cost averaging does not assure a profit or protect against loss in declining markets – for the strategy to be effective, you must continue to purchase shares in both market ups and downs.

“Millions of our customers are using this approach to save for retirement,” continued Fisher. “When applied to a long-term savings strategy, a lower average cost for the investments in their retirement account may help them accumulate more money for retirement.”




About Fidelity Investments
Fidelity’s goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.4 trillion, including managed assets of $2.1 trillion as of June 30, 2016, we focus on meeting the unique needs of a diverse set of customers: helping more than 25 million people invest their own life savings, nearly 20,000 businesses manage employee benefit programs, as well as providing nearly 10,000 advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for nearly 70 years, Fidelity employs 45,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit
1 Analysis based on 22,000 corporate defined contribution plans and 14.2 million participants, as of June 30, 2016. These figures include the advisor-sold market, but exclude the tax-exempt market. Also excluded are non-qualified defined contribution plans and plans for Fidelity’s own employees. Fidelity’s IRA analysis based on 8.2 million IRA accounts.
2 Millennial generation includes individuals born between 1981 and 1998, as defined by Pew Research.
3 Individuals who were actively employed by their plan sponsor and held an account balance >$0 throughout the past 10 years.