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Description
Mutual fund firm Fidelity Investments, which conducts retirement readiness research every quarter, reported that Americans put 8.2 percent of their pre-tax income into employer sponsored 401(k) retirement savings plans last year.
The rate was steady through all four quarters of 2009 but down slightly from previous years as the financial crisis cost millions of Americans their jobs and homes and prompted many to remove money from their retirement nest-eggs to pay bills.
During the fourth quarter of 2008, Fidelity said investors saved 8.4 percent while their deferral rate stood at 8.8 percent during the same period of 2007.
"The good news is that many workers, in spite of the economy, chose to save in their 401(k)s throughout 2009, and as the markets recovered, so did many Americans' account balances," Jim MacDonald, president of Workplace Investing at Fidelity, said in a statement.
In 2008 Fidelity reported that higher gasoline and food prices prompted more Americans to pull money from their retirement savings plans.
Boston-based Fidelity found that rising stock prices helped the average U.S. employer-sponsored retirement plan grow by 28 percent to $64,200 last year. In 2009 the Standard & Poor's 500 index gained 26 percent.
Last year's gain followed the financial crisis when tumbling stock prices took a huge bite out many retirement accounts.
Fidelity also reported that steady contributions to these savings plans paid off during the last decade.
The company said workers who had saved steadily throughout the last decade would have seen their average balances climb some 150 percent.
Participants had a median age of 51 years and a 10.4 percent deferral rate.
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