NEW YORK–For the first time ever, Gen X workers saw their 401(k) balances top those of Baby Boomers, according to new data.
Fidelity is reporting that balances for Gen X workers who have been saving for 15 years averaged $543,400, or $200 more than Boomers’, according to the financial service firm’s analysis of its more than 22 million accounts in the first three months of the year, USA Today reported. Gen X, born between 1965 and 1980, is the next generation to retire behind the Boomers, who were born between 1946 and 1964 and are retiring now.
“Gen X is often referred to as the forgotten generation, sandwiched between the large and culturally powerful Boomers and Millennials,” USA Today stated. “It’s also the first generation to start working as 401(k)s replaced pension plans. Surveys have shown many of them don’t have nearly enough for retirement, but Fidelity’s report shows some green shoots.”
Two Factors Cited
Mike Shamrell, Fidelity’s vice president of workplace thought leadership, told USA Today two factors are driving the trend:
What’s driving the trend?
- Boomers are retiring, so they’re not contributing to their nest egg and instead are drawing down their 401(k) savings, as they should.
- Gen X is approaching retirement, so they’re more aggressively saving as much as they can.
“In fact, Gen X on average saved more of their annual pay than even what Fidelity recommends,” USA Today reported. “Fidelity suggests workers save 15% of their paycheck, including employer contributions, and Gen X topped that with 15.2%.”
Large Discrepancy Found
However, the nonprofit research group National Institute on Retirement Security said that after examining 2020 Census Bureau data, it found large discrepancy between average and median savings, with the average employer-sponsored retirement account at $173,553 and the median at $50,000, USA Today reported.
“It is a function of a relatively small number of people successfully saving significant amounts for retirement, while many others struggle to save at all,” the organization told the publication.