Finance

401(k) balances hit second highest on record: Fidelity

Published

3 months ago

February 27, 2025

Ramsey Solutions financial expert George Kamel weighs in on Americans working past retirement age and provides advice for investors.

Balances for 401(k) retirement accounts hit the “second-highest average on record” in the final quarter of 2024, according to new data from Fidelity Investments.

The financial services company found in its newly-released fourth-quarter retirement analysis that balances for that type of retirement plan averaged $131,700.

That figure marked a jump of 11% year-over-year, according to Fidelity.

Close up of a 401(k) statement with a pie chart indicating asset allocation.To see more of my financial images click on the link below: (iStock / iStock)

Compared to 2024’s third quarter, however, average balances for 401(k)s posted a 0.5% decline, the analysis showed. The third-quarter was when 401(k) plans notched their “highest average on record” for balances, with an average of $132,300.

The rate at which 401(k) retirement plan holders socked away money inched up year-over-year to 14.1% in the fourth quarter, according to Fidelity.

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Similar to 401(k)s, average balances for two other popular retirement vehicles – IRAs and 403(b)s – saw small declines of 1% from the third quarter but showed year-over-year increases.

Fidelity pegged the average balance for 403(b) accounts at $117,800 in the fourth quarter, up 11% compared to a year ago.

Meanwhile, IRA accounts held average balances of $127,543. That’s an increase of 8% from the fourth quarter of 2023, according to the report.

A senior couple using a laptop to help organize their retirement plans. (iStock)

Fidelity’s fourth-quarter analysis included over 50 million retirement accounts.

Overall, the financial services company said people building nest eggs “experienced a year of positive growth” in 2024.

Retirement contribution rates went up for almost 40% of those saving for their golden years, Fidelity also reported. On average, the increase was 2.9%.

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“As we have for several quarters now, we observed upwards savings trends in Q4. This is encouraging news and is particularly important for many Gen X savers, who are able to make catch-up contributions,” Head of Fidelity Wealth Roger Stiles said in a statement. “This is an important consideration as the April tax deadline approaches where investors may be able to contribute to an IRA for potential tax deductions for 2024.”

The deadline for individual tax return filing is April 15, according to the IRS.

Fidelity also highlighted the retirement saving efforts of Generation X – people born between 1965 and 1980 – in its latest analysis.

When it came to IRAs, Gen Xers boosted their average contributions 16% year-over-year, according to the financial services company.

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Meanwhile, Gen Xers that have been putting money in 401(k) accounts regularly over 15 years achieved average account balances of $589,400, a jump of 18% from the same period last year, per Fidelity.

A person puts money into a retirement savings jar. (iStock / iStock)

Americans think $1.46 million is the amount of money necessary to experience a comfortable retirement, according to a study released by Northwestern Mutual last year.

The Transamerica Center for Retirement Studies found in an August 2024 report that the median age of retirement for middle-class retirees was 62.

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2 days ago

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Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

2 days ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”