NEW YORK (MainStreet) Nest eggs in 401(k) accounts are on the rise, a new survey says.
IRA and 401(k) provider Fidelity Investments reports its average 401(k) balance stands at $88,600 at the end of the first quarter of this year, a 9% year-over-year increase. This balance is a staggering 92% higher since the first quarter of 2009, during the height of the financial recession, when the stock market reached record lows.
Still, retirement savings remains a murky financial goal, often interrupted by other financial tasks.
"We understand that saving for retirement competes with numerous financial goals such as the purchase of a home, college tuition and the escalating costs of health care in retirement," said Julia McCarthy, executive vice president of workplace investing at Fidelity.
The 2008 financial recession not only resulted in a massive loss of wealth, it also altered investors' views of the stock market.According to a Gallup poll from early 2014, half of participants were opposed to investing $1,000 in the stock market, compared to 62% after the recession almost six years ago. However, the broad S&P 500 has increased 175% since its March 2009 low, indicating the magnitude to which investors have missed out on significant wealth-building opportunities over the past several years.
When it comes to building a more sustainable 401(k) account, TIAA-CREF's director of financial planning Dan Keady stresses the distinction between a 401(k)'s nest egg and income. "It's not just the amount of money in your 401(k) that you need to be aware of, but it's ultimately the amount of income you can generate from that nest egg to live off of," he said.