Gen X Sparks Record Retirement Savings: How They’re Leading the Way!
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Generation X is stepping up its game when it comes to preparing for retirement, according to fresh insights from Fidelity Investments.
In an eye-opening third-quarter retirement analysis, the financial giant revealed that Gen Xers have dramatically increased their contributions to individual retirement accounts (IRAs), with contributions soaring by an impressive 35% compared to the same period in 2023.
For context, Gen Xers are those born between 1965 and 1980.
A serious couple meticulously calculating their finances, planning their budget for a secure future. (Istock / iStock)
When compared to last year, Gen Xers have also boosted their IRA contributions by 23% during the third quarter, signaling a strong trend toward securing their financial futures.
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Fidelity noted that Gen X savers are making “remarkable strides across all types of retirement accounts,” including IRAs, 401(k)s, and 403(b)s.
For those Gen Xers who have consistently contributed to their 401(k) plans for over 15 years, the average account balance soared to $586,100, marking a 6% increase from the previous quarter, according to Fidelity’s figures.
“We’re thrilled to see Gen X retirement savers achieving substantial growth in their savings,” declared Roger Stiles, President of Fidelity Wealth. “With the oldest members of this generation nearing retirement in the next five to ten years, now is the ideal time to concentrate on building a nest egg that will enable a comfortable retirement.”
This positive news follows Fidelity’s findings that overall retirement savings have enjoyed another quarter of growth, driven by robust contribution levels and favorable market conditions. Their analysis included over 49 million retirement accounts—an extensive look at the landscape.
Remarkably, two retirement plans—401(k)s and 403(b)s—recorded their “highest average on record” for account balances in the third quarter.
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For 401(k) accounts, the average balance hit $132,300, reflecting a 4% rise from the previous quarter and an impressive 23% increase year-over-year.
Younger Americans are increasingly choosing “microretirements” earlier in their careers, opting for short breaks instead of waiting for a traditional retirement. (Getty Images / Getty Images)
Average balances in 403(b) accounts also experienced a boost, reaching $119,300, while IRAs averaged $129,200 for the quarter.
Fidelity’s analysis found that the overall average savings rate remained steady at 14.1%, just shy of the recommended 15%.
“Consistency in retirement contributions across various market fluctuations is crucial. Staying committed over the long haul is what truly paves the way for a secure financial future,” stated Fidelity Investments’ President of Workplace Investing.
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Earlier this year, a survey revealed that Americans believe they need a whopping $1.46 million to retire comfortably.
A dedicated individual adding to their retirement savings jar. (iStock / iStock)
Interestingly, around 57% of working Americans feel they are lagging in their retirement savings, according to a recent Bankrate survey. In contrast, 15% believe they are either “significantly” or “slightly ahead” of their savings goals, while 22% feel they are “right on track.”
