Retirement Balances Near $100K Mark

As this bull market continues, Americans are reaping the rewards in their 401(k) accounts. Stocks account for more than three-quarters of the retirement balance increase.

As this bull market continues, Americans are reaping the rewards in their 401(k) accounts. At the end of the second quarter of 2014, 401(k) balances reached an all-time high of $91,000, according to Fidelity.

From a year ago, the average balance increased 12.9% from $80,600. This number reflects all employees at various stages of their careers, including those who just started a job and those who are near retirement. IRAs have a slightly larger balance: $92,600, which is up 14.7% over the same period one year prior.

“The recent record markets have resulted in increased retirement savings for millions of Americans,” Jim MacDonald, president of Workplace Investing for Fidelity Investments, said in a statement. “Now is a perfect time for people to seek guidance to ensure their savings and investment strategies can weather all market conditions.”

More than three-quarters (77%) of the one-year balance increase of 401(k)s is due to the equity markets and the remaining 23% is a result of employee and employer contributions. While the stock market remains significant, employee contributions are growing. Over the last year, employees contributed an average of $6,050 and an average of $3,540 was contributed by employers. In the second quarter of 2010, just after the recession, employees contributed an average of $5,650.

While $91,000 is a new record high, the number is low because it takes into account new employees who have saved little. Fidelity’s analysis of its 401(k) and IRA accounts revealed that employees who have been have active in their workplace 401(k) account for 10 years have a balance of $246,200. Over the past decade, the average balance for these workers is up 15% per year for 10 years.