Wall Street’s blockbuster gains in 2021 helped pad savers’ retirement accounts, lifting the average balance on some popular investment plans to new highs.
The average 401(k) plan balance stood at $130,700 at the end of last year, up 7.6% from 2020, according to Fidelity Investments. The median balance, a better measure of the typical plan size, rose 2.1% to $28,600. The figures are based on a review of 20.4 million Fidelity accounts. Only about 60 million Americans actively participated in 401(k) plans at the end of the third quarter last year, according to the Investment Company Institute, an association representing investment funds.
The average balance for individual retirement accounts on Fidelity’s platform also climbed to a record-high $135,600 as of the fourth quarter of 2021, up 5.9% from a year earlier.
Retirement plan gains came as cheap money thanks to historically low interest rates combined with strong consumer demand and corporate earnings growth to keep investors in a buying mood.
