While market volatility has made workers in the U.S. nervous, they have “stayed the course” in contributing to their various retirement accounts according to retirement savings data from several investment firms as reported by MarketWatch.
“After years of a bull market, investors may have been unnerved by the volatility that continued in the markets into the second quarter of 2022,” the report reads. “But they held tight, according to various investment firms’ data on their retirement savers. Most participants didn’t trade within their accounts, and if they did, they moved money into investments as opposed to out of them.”
Certain other activity related to the accounts has been impacted, however.
“Loans and withdrawals have also dropped for the most part, though many Americans continue to suffer from stress over their finances,” the report continued. “Contributions have remained steady throughout all of this, the firms said.”
According to data from Fidelity Investments shared with the outlet, the savings rate for its 401K plans remained at 14%, what it describes as “very high” and only 1% off from a common suggestion of financial advisors to save 15% of total income according to data shared from Q2 2022.
“The total number of IRAs increased by the double digits since the second quarter of last year — and younger generations were the force behind that, Fidelity said,” the outlet reported. “The number of accounts opened by members of Gen Z jumped 87% compared with the second quarter of 2021, and 24% for millennials.”
Market volatility did negatively affect account balances, but those declines did not match what the market saw in the second quarter, the firm’s data indicated to MarketWatch. There were also positive signs from other retirement account providers.
“Charles Schwab saw similarly good behavior from its retirement investors — 98% of participants maintained their 401K savings rate last month, just as they had been throughout the pandemic, according to Schwab Retirement Plan Services’ data of participants,” the outlet reported.
The data also suggests that more people are seeking out personal finance and retirement planning content online, according to a thought leadership executive at T. Rowe Price.
Read the report at MarketWatch.