• According to Fidelity, the average balance of retirement accounts reached its highest level since the fourth quarter 2021.
  • It can be helpful to compare how workers in the same industry are performing to see if they have achieved their savings goals.

Jose Luis Pelaez Inc

You can compare your balance to the progress of other savers. You may find that those in your profession are better to compare with than those in the same age range.

According to recent data provided by Fidelity, 401(k), plan investors using the platform of the company had an average balance of $125.900 in the first three months.

The average balance for baby boomers was $241.200, while the average for Gen X was $178.500, and for millennials it was $59,800. Gen Z had a balance of $11,300.

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Comparing balances between industries can help savers compare themselves to their peers.

Mike Shamrell is vice president for thought leadership and workplace investing at Fidelity. He says that Fidelity compiled industry data to help companies using its 401(k), platform, better understand the savings habits of their employees.

Shamrell said that many companies are still in a battle for talent, and their 401(k), or retirement plans, are used as a tool to hire.

Shamrell explained that “they want to ensure that their actions are aligned with those of the companies with whom they compete for talent.”

He noted that the average 401(k), or retirement fund, tends to be greater in industries with higher salaries.

The average 401(k), which is $306,400, belongs to the legal services industry.

The petrochemical industry came in second, with $255,500, followed by energy production/distribution, with $214,400.

Retail trade has the lowest average 401 (k) balance, at $51,200, followed by health care, excluding physicians with $66,600, and real estate with $70 700.

Experts say that you should instead focus on

Experts say that instead of balances, the best way to measure a worker’s retirement savings is by their overall savings rate. Fidelity recommends that workers aim to save 15% of their income before taxes, including contributions from employers, for retirement.

Fidelity 401(k), including employer and employee contributions, had a total average savings rate of 14.2%. This is the closest to the recommended rate ever.

Experts say that while workers might get distracted by the size of their nest egg, they should focus on consistently high saving rates. A recent Northwestern Mutual study found that people believed they needed $1.46m in order to live comfortably during retirement.

Pharmaceuticals have the highest total savings rate, at 19.7%, followed by petrochemicals with 19.1% and airlines with 18.4%.

Retail trade has the lowest rate of average savings, at 10.4%. Health care excluding physicians is 10.9%, and construction, scientific and technical are each 12.3%.

Employer assistance is the most generous

To have a high savings rate it is important to receive generous employer contributions. According to Fidelity, the average contribution rate of employers is 4.8%.

Petrochemicals has the highest employer contribution rate at 8.2%, followed by pharmaceuticals and airline industries, both with 7.8%.

Retail trade, scientific and technical, and scientific and technological are the industries with the lowest employer contribution rates.

It is true that any progress made in saving for retirement may be slowed down if investors borrow money from their 401(k), as 17.8% have done.