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The US economy has been severely affected by the coronavirus, and American retirement savings have not been spared.
Last week, Fidelity Investments released the results of its analysis of retirement savings trends for the first quarter of 2020.
The financial services company has analyzed more than 30 million 401 (k), IRA and 403 (b) retirement accounts, according to the report.
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Ultimately, the economic downturn caused by the coronavirus caused Americans’ retirement savings to fall, Fidelity said.
According to the report, the average account balance 401 (k) was $ 91,400 in the first quarter, while the average IRA was $ 98,900 and the average 403 (b) was $ 75,700.
For the average 401 (k), this was 19% lower than last year’s record high of $ 112,300. Meanwhile, the average ERI balance fell 14% from the last quarter and the average 403 (b) balance dropped 19% from the last quarter.
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“Given the unprecedented market volatility this quarter, it is not surprising that account balances were affected, although the declines were less than the overall market decline,” said Kevin Barry, president of Fidelity, Workplace Investing, in a press release. “It was encouraging to see that many investors stayed the course and did not make drastic changes to their asset allocation, with some investors increasing contributions to their retirement accounts.”
“However, we know that investors continue to be concerned about how the economic environment and the global pandemic can affect their health and financial future, and we are already seeing the impact of the market downturn on our customers.” added Barry.
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In addition to the average American retirement account balance, Fidelity also found that most people maintained their retirement contributions – some savers increasing their contributions despite the uncertain market.
According to the report, 15% of 401 (k) savers increased their contribution rates in the first quarter. There was also a 10% increase in average ERI contributions in the first quarter of 2020 compared to the first quarter of 2019.
Fidelity also found that more than 407,000 IRA accounts were opened in the first quarter of 2020, 36% more than in 2019 during the same period.
Gen Y members are particularly focused on ARIs, according to Fidelity, who found that “Gen Y contributions increased 41% from last year, while Gen Y contributions increased 64%, “says the report.
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