Wild market swings have taken a toll on retirement savers.
The average 401(k) balance plunged 19%, to $91,400, in the first quarter of 2020, according to a new report by Fidelity Investments, the nation’s largest provider of 401(k) plans. The financial services firm handles more than 30 million retirement accounts altogether.
The average individual retirement account balance also fell, by 14%, to $98,900.
Before the coronavirus wreaked havoc on the economy, 401(k) and IRA balances were at record highs. The average 401(k) balance was $112,300 in the fourth quarter of last year, while the average IRA balance was $115,400.
“Given the unprecedented market volatility this quarter, it’s not surprising that account balances were impacted, although declines were less than the overall market decline,” Kevin Barry, president of workplace investing at Fidelity, said in a statement.
Still, the majority of retirement savers continue to contribute, Fidelity found. The average 401(k) contribution rate held steady at 8.9%, while the employer contribution stayed at 4.7%.
There was a slight uptick, however, in the number of savers who changed their asset allocation, with most moving their savings into a more conservative investment option, Fidelity said.
And only 1.4% of savers took a hardship withdrawal from their 401(k) as of March 31, 2020 — largely before the federal CARES Act made it easier to access your retirement money penalty free for coronavirus-related reasons.