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Record number bump up 401(k) contributions

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A record 23 percent of participants in Fidelity-provided 401(k) plans increased their contribution rates in the first quarter of 2015, according to the company’s Quarterly Retirement Snapshot.

The good news for the 13.5 million participants in Fidelity plans did not stop there. The average account balance was $91,800, up 3.6 percent from a year ago, and for those participants with at least 10 years in a plan, the average balance was $251,600, up 12 percent year-over-year.

Those figures outpace averages calculated by the National Institute on Retirement Security, which reported that the average retirement account balance nationwide was about $50,000. For pre-retirees, age 55 to 64, it was $104,000, and for workers 45 to 54, the average savings rate is $87,000.

In Fidelity plans, the overall savings rate increased to 12.5 percent, with employees deferring an average of 8.1 percent of income into accounts, and employers matching an average of 4.4 percent of salaries.

Auto enrollment is up slightly from last year, as about 28 percent of plans include the feature, while 13 percent of Fidelity’s sponsor clients automatically increase deferrals.

Data was gleaned from the firm’s 21,100 defined contribution plan base.

Average IRA balances also hit a record high at $94,100, up 5 percent from the last quarter, as investors contributed $3,150 to the accounts.

Fidelity clients that both participate in a 401(k) and own an IRA have $267,200 in their accounts, on balance.

Participants in SIMPLE IRAs contributed an average of $6,260 in 2014, a little more than half of the $12,000 contribution limit last year, according to the IRS.

Self-employed, or SEP IRAs had average contributions of $14,000 last year, a 20 percent increase from 2007.

“Contributions to retirement savings accounts have increased across the board. We’re very encouraged by this trend and hope to see it continue, considering that any increase in savings — even by one percent a year — can have a positive impact on long-term retirement success,” said Jim MacDonald, president of Fidelity’s Workplace Investing Unit.

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