Investors are concerned about their personal finances due to the current state of the financial market, but they are still planning for their retirement.
Investors’ anxiety about the economy is understandable given the current environment, which features both high inflation and rising interest rates.
In the past year, there has been an increase in the number of people who report having negative feelings regarding their financial situation.
This is what the 3Q analysis of saving behaviors and account balances from Fidelity Investments found to be the case.
In the past year, the percentage of people who have feelings that are negative has grown to 32%, which is a higher number than the 30% of people who have sentiments that are positive.
A year ago, the percentage of people who had positive feelings was 45%, which was twice as high as the percentage of people who had negative feelings.
Despite declining balances, investors have maintained a positive attitude toward their retirement savings.
The average amounts in retirement accounts continued their downward trend for the third quarter in a row.
This quarter, the average 401(k) balance was $97,200, which is a decrease of 22.9% from the same time last year, a decrease of 6% from the second quarter of 2022, and a rise of 28% from the same time ten years earlier.
The typical amount in an individual retirement account (IRA) as of the end of the third quarter was $101,900. This represents a decline of 8% from the previous quarter and an increase of 33% from the end of the third quarter ten years prior.
The most recent investigation revealed that there are some bright spots.
Despite the fact that average account balances have declined, the data suggests that people who are saving for retirement have maintained their focus on their retirement goals and have not wavered in their resolve.
The number of individual retirement accounts (IRAs) held on Fidelity’s platform has been steadily climbing, while the percentage of employees holding 401(k) loans have stayed at a historically low level for the sixth consecutive quarter.
According to Kevin Barry, president of Workplace Investing at Fidelity Investments, “the market has taken some dramatic changes this year, including the greatest month this past October since 1976.” “The market has made some dramatic twists this year,” “Those who are putting money down for retirement have, in their wisdom, decided to steer clear of the turmoil and keep focusing on the long-term,”
Even while consumers are continuing to put money into their retirement accounts, the rate at which they are saving money has slowed down slightly.
Contributions to 401(k) plans made by employers and employees together have remained relatively stable at 13.8% over the past three months, although this figure is lower than the percentages recorded in the preceding two quarters and is only marginally lower than the savings rate that Fidelity recommends, which is 15%.
In spite of these concerns, Fidelity Investments started offering customers a Digital Assets Account this fall.
Employers sponsoring a 401(k) plan via Fidelity have the option to offer this account to their employees, allowing them to invest a portion of their savings in bitcoin.
The Fidelity bitcoin account offers an alternative to typical 401(k) investments such as stock and bond funds. The Digital Asset Account contains bitcoin and cash-like short-term assets that are intended to ease daily transactions.
With over 35 million IRAs, 401(k), and 403(b) accounts, Fidelity Investments is the leading supplier of individual retirement plans in the United States.