The average IRA balance increased compared to last quarter and last year to $111,500, according to Fidelity. The average 401(k) balance increased to $104,400, a 14% jump compared to last quarter, but was down 2% compared to a year ago.
"While the stock market’s performance in Q2 helped drive workplace retirement account balances higher, employer contributions also played a key role," Fidelity's President of Workplace Investing Kevin Barry said. "Nearly 90% of employers continued to offer matching contributions to their employees over the last quarter, despite the unsteady business landscape."
Retirement account balances saw double-digit growth because of a surprisingly healthy stock market despite the pandemic's effect on economic uncertainty, according to Fidelity.
The CARES Act signed in March enabled individuals to tape their retirement savings without paying a penalty to cover essential needs, but only 3% of eligible employees used the CARES Act provision to withdraw from a retirement account.
Younger savers also opened a growing number of IRA accounts in the second quarter despite market volatility. The number of millennial IRA accounts grew 23% year over year, according to Fidelity.
Roughly one-quarter of Americans, however, "have no retirement savings or pension whatsoever," according to a report from the Federal Reserve based on 2018 data.