Android app on Google Play

Fidelity’s Average IRA Contributions Climb to over $4,000— an All-Time High

July 23, 2014 8:26 AM EDT Send to a Friend

Use of mobile check deposit app surges, making it easier for customers to make contributions into IRA accounts

BOSTON--(BUSINESS WIRE)-- Fidelity Investments® today released its second annual analysis of over seven million Individual Retirement Accounts (IRAs), which revealed that average contributions for tax year 2013 reached $4,1501, a 5.7 percent increase from tax year 2012 and an all-time high. Average balances were $89,100, a nearly 10 percent year-over-year increase.

“Saving more, paying off debt and spending less were the top three New Year financial resolutions cited in a recent Fidelity study2 and our IRA analysis indicates that Americans are taking those financial resolutions seriously,” said Ken Hevert, vice president, Fidelity Investments. “The fact that IRA contributions are up across all age groups is a positive indication that many people are indeed committed to saving for retirement by putting at least a portion of what they earn into tax-advantaged vehicles such as an IRA.”

The findings from Fidelity, the No. 1 provider of IRAs to investors3, shows investors 50 years of age and over continue to save the most in Traditional and Roth IRAs. Younger investors, those in their 20s, 30s and 40s, are adopting strong savings behaviors and have made strong increases with overall average contributions—3.9 percent, 6.7 percent and 6.2 percent, respectively from 2012 tax year to 2013 tax year.

Additionally, average contributions to Roth IRAs continue to outpace average Traditional IRA contributions on both ends of the age spectrum. Younger investors, who are more likely to be eligible to contribute directly to a Roth IRA, can take advantage of tax-free growth potential and withdrawals, while older investors utilize the savings vehicle when they are no longer able to contribute to a Traditional IRA as a result of reaching age 70 ½.

Full contribution rates by age are as follows:

Age Range

  Average Roth IRA Contribution

(2013 Tax Year)

  Average Traditional IRA Contribution

(2013 Tax Year)

  Overall Average IRA Contribution

(2013 Tax Year)

20-29   $3,370   $3,310   $3,300
30-39   $3,480   $4,210   $3,540
40-49   $3,660   $4,410   $3,820
50-59   $4,720   $5,100   $4,730
60-69   $5,200   $5,140   $4,990
70+   $5,040   $4,960   $4,960
All Ages   $4,690   $4,027   $4,150

In addition, the findings show that average balances were $89,100, a nearly 10 percent year-over-year increase and balances across all age groups are on the rise. Hevert said, “Annual contributions – along with age appropriate asset allocation strategies – play key roles in building a strong foundation for retirement.”

Age Range

  Average IRA Balance At End of 2013 Tax Year   Average IRA Balance At End of 2012 Tax Year  

Percentage Increase

20-29   $9,600   $9,300   3.2 Percent
30-39   $22,300   $20,700   7.7 Percent
40-49   $45,600   $42,500   7.3 Percent
50-59   $83,100   $75,700   9.8 Percent
60-69   $138,200   $127,800   8.1 Percent
70+   $177,700   $164,300   8.2 Percent
All Ages   $89,100   $81,100   9.9 percent

Technology makes it easier to save and meet tax deadlines

During tax year 2013, Fidelity customers increased their use of mobile check deposit with Fidelity Mobile Apps® for smartphones and tablets by over 1,000 percent. By using a mobile device’s camera, customers can easily snap a photo of a check and quickly deposit funds into their Roth and Traditional IRA accounts. Hevert said, “We know it’s human nature for many individuals to procrastinate but Fidelity Mobile Apps make it easy for customers to stay connected with their accounts and make timely retirement contributions while they are on the go.”

Looking to Boost Your Retirement Savings?

For those looking for support on investing and/or tax planning strategies, Fidelity offers educational articles through its Viewpoints series on saving for retirement, including “Time for a review,” “Nine compelling reasons to consider a Roth IRA”, “Roth or Traditional IRA or 401(k)” and “Roth conversion Q&A.” Fidelity’s IRA Center details the benefits of and types of IRAs, including differences between Traditional and Roth IRAs, and offers tools and resources for investors online. The Center also makes available calculators that help investors determine how much can be contributed, amounts that are tax-deductible and which type of IRA may be right for you.

About Fidelity Investments

At Fidelity, our goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. We do this by focusing on a diverse set of customers: from 23 million people investing their own life savings, to 20,000 businesses needing help managing their employee benefit programs to 10,000 advisors and brokers needing technology solutions to invest their own clients’ money. Privately held and with 40,000 employees around the world, Fidelity is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products.

As of June 30, 2014, the company held assets under administration of $4.9 trillion, including managed assets of $2.0 trillion; it is one of the largest mutual fund companies in the U.S. and the No. 1 provider of both workplace savings plans and Individual Retirement Accounts (IRAs). For more information about Fidelity Investments, visit www.fidelity.com.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Past performance is no guarantee of future results.

Fidelity Brokerage Services LLC, Member NYSE, SIPC900 Salem Street, Smithfield, RI 02917

Clearing, custody or other brokerage services may be provided by National Financial Services LLC, or Fidelity Brokerage Services LLC. Members NYSE, SIPC. 200 Seaport Blvd, Boston, MA 02210.

Fidelity Investments Institutional Services Company, Inc.500 Salem Street, Smithfield, RI 02917

693993.1.0

© 2014 FMR LLC. All rights reserved.

1 January 1, 2013 through April 30, 2014

2 This study presents the findings of a telephone survey conducted among two national probability samples, consisting of 2,027 adults, 18 years of age and older. Interviewing for this CARAVAN® Survey was completed on November 7-11, 2013 by ORC International, which is not affiliated with Fidelity Investments. The results of this survey may not be representative of all adults meeting the same criteria as those surveyed for this study. For more information on Fidelity’s New Year Financial Resolutions Study, an executive summary and infographic can be found on Fidelity.com.

3 Cerulli Associates’ The Cerulli Edge®—Retirement Edition, fourth quarter, 2013 based on an industry survey of firms reporting total IRA assets administered for Q3 2013.

Contact for Media Only:

Fidelity Corporate Communications, 617-563-5800

Follow us on Twitter @FidelityNews

or

Fidelity Investments

Deborah Pont, 401-292-5318

Deborah.Pont@fmr.com

or

Joe Madden, 617-901-0469

Joseph.Madden@fmr.com

Source: Fidelity Investments




You May Also Be Interested In


Related Categories

Press Releases

Related Entities

Twitter, Fidelity Investments, SIPC

Add Your Comment