retirement bag of money

Average balances and contributions to retirement accounts increased in the first quarter, according to Fidelity Investments’ Quarterly Retirement Snapshot.

The average 401(k) balance at the end of the quarter was $91,800, up 0.5% from last quarter and up 3.6% from one year ago.

More than a million workers increased their contribution rate during the quarter, and a record 23% of employees have increased their contribution rates since the first quarter of 2014.

The average overall savings rate, which includes both employee and employer contributions, increased to 12.5%. The employee contribution rate remained constant at 8.1%, while the employer contribution rate climbed to 4.4%. For employees in a 401(k) plan for 10 years or more, the average balance was $251,600, up 12% year over year.

The average Individual Retirement Account balance at the end of the fist quarter was $94,100, a record high and up 5% over last quarter. While the average IRA contribution in the quarter was $3,150, a slight drop from the Q1 2014 average contribution of $3,270, the overall percentage of investors making a contribution to their IRA in the first quarter was 7% higher than in Q1 2014, and among investors under age 35 the increase was 26% year-over-year.

A CNBC article last week said that despite the increased savings rate, one in 5 elderly Americans “dies broke,” according to a Employee Benefit Research Institute study.

“Yes, the balances are increasing, but it’s not near enough what people need,” certified financial planner Carolyn McClanahan told CNBC.

While the goal is to save 10% to 15% of income for retirement, including the employer match, people should at least save enough to cover basic needs — shelter, food, health care — in retirement, McClanahan said.

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