man with eyes that have dollar signs for pupils (Photo: Shuttestock)

The average 401(k) balance in workplace retirement plans for which Fidelity is the recordkeeper hit an all-time high in the last quarter of 2019, at $112,300.

That marked a 7% increase from the third quarter of last year, and a 17% increase from the end of 2018.

And it’s nearly double the average balance of $62,600 at the end of 2009, when retirement savers were still reeling from the retirement crisis and beginning to recover from 2008’s pillage.

Strong equity markets are behind record-breaking averages. Last year alone, the S&P 500 returned 28.9%, just shy of 2013’s 29.6%.

The index has only had two losing years since the financial crisis, in 2015 and 2018.

But Fidelity’s data shows that improved plan design and better savings habits have also influenced higher accounts.

The average individual savings rate was 8.9% in the fourth quarter of 2019, also a record high. When accounting for employer matches, the average savings rate was 13.5%.

Last year, one-third of employees increased their savings rate by an average of 3%. Four in 10 did so on their own; six in 10 were increased via auto-escalation features.

Record Number of 401(k) Millionaires

There are more 401(k) millionaires than ever in Fidelity plans.

By the end of the year, 233,000 savers had at least $1 million in their accounts. Fidelity’s 401(k) data comes from 23,000 plans and 17.3 million participants.

Long-term savers—those defined as being in their 401(k) plans for at least 10 consecutive years—had an average balance of $328,200. Savers invested for 15 years had an average account balance of $421,700.

Longer-tenured female savers’ balances averaged $261,000, the first time that demographic’s average surpassed a quarter million dollars. Millennials with 10 years of savings averaged $149,000, also a record high.

More Employers Using Auto-Features

By the end of last year, 35% of employers were automatically enrolling new hires, a record level. More than a third are auto-enrolling at a 5% or higher deferral rate, compared to just 12% that did so at the end of 2009.

Nearly one in five employers have implemented automatic escalation of savings rates, more than twice the number a decade ago. One-third of plans offered a managed account option to savers, double as many as did at the end of 2014. But take-up rates, while increasing, are still low, as adoption of managed accounts was only 3.6% in 2019.

IRAs Hitting Records Too

The average IRA balance was $115,400 at the end of 2019, another record and nearly twice the value of the average account a decade ago. There were 208,000 IRA millionaires, an increase from 182,400 from the third quarter last year.

Contributions to IRAs are increasing, as the number of millennials contributing to an individual account increased by 21%.

Millennials contributed $373 million to IRAs in the fourth quarter of last year, 73% of which went to Roth IRAs.