Finance

Gen X helps drives retirement savings balances to new record

Published

5 months ago

December 5, 2024

Generation X has been boosting its efforts to build nest eggs for retirement, according to the newly-released data from Fidelity Investments.

The financial services company reported Thursday in its third-quarter retirement analysis that Gen Xers socking away money in individual retirement accounts (IRAs) upped their total contributions by a whopping 35% from the same period in 2023.

It considered Gen X to be people born in the years 1965 through 1980.

Compared to a year ago, more Gen Xers also put money into their IRA accounts in the third quarter, according to Fidelity. That jump was 23%.

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The financial services company said in a press release that Gen X made “impressive gains across all retirement accounts” including IRAs, 401(k)s and 403(b)s.

When it came to Gen Xers that have been playing the long-game and setting aside money in 401(k) plans on a regular basis for the past 15 years, there was a 6% quarter-over-quarter increase in their average account balance to $586,100, per Fidelity’s data.

“We are pleased to see Gen-X retirement savers continue to make solid gains with their retirement savings,” President of Fidelity Wealth Roger Stiles said in a statement. “The oldest members of this generation will be approaching retirement in the next five to ten years, making this the perfect time to focus on securing a nest egg that can help them live more comfortably throughout their retirement years.”

This comes as Fidelity found that people saving up for their golden years overall “experienced another quarter of growth thanks to continuing strong contribution levels, and positive market conditions.” Its analysis included over 49 million retirement accounts.

Two types of retirement plans – 401(k)s and 403(b)s – notched their “highest average on record” for balances in the third quarter, the financial services company said.

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For 401(k) accounts, balances averaged $132,300 in the third quarter, a quarter-over-quarter increase of 4% and a year-over-year increase of 23%, according to Fidelity.

Average balances in 403(b) plans notched similar increases, hitting $119,300.

Meanwhile, the average balance for IRAs came in at $129,200 for the quarter.

Fidelity’s retirement analysis reported the total average savings rate in the third quarter “held steady.” It pegged it at 14.1%, just shy of the 15% the company recommends.

“Consistent retirement contributions during various market cycles is important, but despite what happens in the market, maintaining this commitment in the long run is what will help set Americans up for a future of financial wellness and security,” Fidelity Investments President of Workplace Investing said in a statement.

AMERICANS REVEAL THEIR BIGGEST FINANCIAL REGRET ABOUT POTENTIAL RETIREMENT

Earlier this year, Northwestern Mutual said Americans think $1.46 million is the amount of money they must have in order to “comfortably” retire.

About 57% of working Americans reported thinking they were on the backfoot when it came to socking away money for retirement, a separate Bankrate survey published in late September found. On the other hand, 15% expressed they were “significantly” or “slightly ahead of where you should be” for it.

Another 22% believed they were “right on track,” per Bankrate.

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T. Rowe Price likes stock picking now

Published

17 hours ago

April 25, 2025

Business Finance News

One of the largest active ETF managers on leveraging fund tactics in new ways

It appears T. Rowe Price is benefitting from the record growth in actively managed exchange traded funds.

Tim Coyne, the firm’s head of ETFs, reports the firm is seeing significant growth in the area — listing the T. Rowe Price Capital Appreciation Equity ETF (TCAF) and T. Rowe Price U.S. Equity Research ETF (TSPA) as two established strategies that can satisfy investor demand.

“I think having that professionally managed portfolio is really beneficial to clients,” Coyne told CNBC’s “ETF Edge” this week. “We’re seeing just… greater volatility [and] uncertainty across both the equity and fixed income markets.“

According to Coyne, the T. Rowe Price Capital Appreciation Equity ETF suits investors who are looking for long-term growth.

“The objective of the fund is to outperform the S&P 500 with lower volatility and greater tax efficiency,” he said. “It’s also a more concentrated portfolio, typically holding around a hundred names.”

As of April 24, the fund’s top holdings include Microsoft, Amazon, and Apple according to the T. Rowe Price website. But it’s not all Big Tech. The ETF also features smaller positions in companies like Becton Dickinson and Roper Technologies.

The T. Rowe Price Capital Appreciation Equity ETF is down about 5% so far this year while the S&P 500 is off about 7% However, the ETF is up close to 8% over the past year — roughly identical to the S&P 500’s performance.

Coyne notes the T. Rowe Price U.S. Equity Research ETF follows a similar strategy, but with a heavier weighting in top tech stocks.

“This is more of a large-cap growth product [T Rowe Price U.S. Equity Research ETF],” he said. “There are components of characteristics of both passive and active here. This fund is actually managed by our North American directors of research. So again, strong fundamental research is going into the stock selection.”

Both the T. Rowe Price U.S. Equity Research ETF and S&P 500 are down around 7% since the beginning of the year. Meanwhile, the fund is up almost 9% over the past year. That’s less than one percent better than the S&P 500’s performance.