Finance

Gen X helps drives retirement savings balances to new record

Published

2 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.

Finance

Chinese investment in the U.S. isn’t likely to pick up under Trump

Published

7 hours ago

January 20, 2025

Business Finance News

Cho Tak Wong, the chairman of auto glass giant Fuyao Glass, bought the vacant General Motors manufacturing plant in Moraine, Ohio in 2014.

The Washington Post | The Washington Post | Getty Images

Chinese investments in the U.S. have dramatically declined since Donald Trump’s first term. This trend is unlikely to reverse as Trump returns to the White House, analysts said.

Trump has threatened additional tariffs on Chinese goods soon after his inauguration on Monday, building on an increasingly tough U.S. stance on Beijing.

“That’s probably the last thing on Trump’s mind, is trying to incentivize [Chinese companies] to invest here,” said Rafiq Dossani, an economist at U.S.-based think tank RAND.

“There’s an ideological mismatch. All the rhetoric is, keep China out of the U.S., let their products come in, which are low-end,” he said in an interview earlier this month. But other than that, “don’t, don’t let them come in.”

In the last several weeks, Emirati property giant Damac has pledged $20 billion to build data centers in the U.S., while SoftBank CEO Masayoshi Son announced a $100 billion investment for artificial intelligence development in the U.S. over Trump’s four-year term.

Trump's stance on China remains unclear, says US ambassador

Chinese investment deals in the U.S. have slowed drastically, according to the latest American Enterprise Institute data. Just $860 million flowed into the U.S. in the first six months of 2024, following $1.66 billion in 2023. That’s down sharply from $46.86 billion in 2017, when Trump began his first term.

At the peak, Chinese companies had made high-profile U.S. acquisitions, such as buying the Waldorf Astoria hotel in New York. But regulators on both sides have stemmed the flow.

“Chinese investment in the U.S. has slowed down dramatically since Beijing tightened control over capital outflows in 2017, followed by a series of regulatory policies in the U.S. aimed at excluding investments in certain sectors,” Danielle Goh, senior research analyst at Rhodium Group, said in an email.

In the “foreseeable future,” she doesn’t expect Chinese investments in the U.S. will recover the peak levels seen during the 2016 to 2017 period. Goh pointed out that instead of acquisitions, Chinese companies have turned more to small joint ventures with U.S. companies or greenfield investments, in which business are built from scratch.

For example, Chinese battery manufacturing company EVE Energy is the technology partner with a 10% stake in a joint venture with U.S. engine company Cummins’ Accelera division, Daimler Truck and PACCAR. The companies announced in June 2024 they were kicking off plans for a battery factory in Mississippi that would begin production in 2027 and create more than 2,000 jobs.

Since the Covid-19 pandemic, the U.S.-China Chamber of Commerce has mostly helped Chinese e-commerce companies set up local offices, rather than establish manufacturing businesses, the nonprofit’s president Siva Yam told CNBC.

“Most of those investment nowadays tend to be a little bit smaller, so they are not on the radar, easier to approve,” he said, referring to regulators in both the U.S. and China. But he remained uncertain about whether Chinese companies could use investments to offset the impact of tariffs.

Individual U.S. states have grown increasingly wary of Chinese investment. Last spring, Politico reported that more than 20 states were passing new restrictions on land purchases by Chinese citizens and companies, or updating existing rules.

Chinese hackers in December targeted a government office that reviews foreign investment in the United States, CNN reported, citing U.S. officials. This was part of a wider breach of the Treasury Department, which declined a CNBC request for comment.

Deal-making strategy?

Trump has indicated tariffs may be used to coerce Chinese investment in the U.S.

In his speech accepting the Republican nomination, he said, “I will bring auto jobs back to our country, through the proper use of taxes, tariffs, and incentives, and will not allow massive auto manufacturing plants to be built in Mexico, China, or other countries.”

“The way they will sell their product in America is to BUILD it in America, and ONLY in America. This will create massive jobs and wealth for our country,” he said, according to an NBC News transcript.

Chinese battery giant CATL reportedly said in November it would build a U.S. plant if Trump allowed it. The company did not immediately respond to a request for comment.

Advocacy group Center for American Progress pointed out in December that during his first term, Trump cancelled restrictions on Chinese telecommunications company ZTE — just days after the Chinese government and Chinese banks invested $1 billion in a Trump Organization-affiliated theme park in Indonesia.

The Trump transition team did not immediately respond to a request for comment on the ZTE deal or the opportunities for Chinese companies to invest in the U.S.

Even if Trump welcomed more Chinese investment, or coerced it through tariffs, large investments are long-term processes that won’t happen overnight, pointed out Derek Scissors, senior fellow at the American Enterprise Institute.