Despite severe market volatility last year, investors saving for retirement are not panicking, according to a new report from Fidelity.
In its fourth quarter retirement trends update, average balances of 401(k)s had been hit hard by the market’s swings, and were down about 10% to an average balance of $95,600.
This also tanked the number of 401(k) millionaires to 133,800 – from187,400 at the end of Q3.
Despite the drop, Fidelity reports that “very few” people decided to make changes to their investments during the tumultuous fourth quarter, in which the S&P 500 lost 14%. Fidelity said 5.6% of its users sold or made adjustments in the heat of the moment, and two-thirds of those customers only made a single change.
Over 98% of Fidelity’s 401(k) savers are still contributing.
“We were encouraged to see that investors, while they were engaged, did not have knee-jerk reactions to the market swings and stayed focused on their long-term savings strategy,” said a Fidelity spokesperson.
The company also noted that for many of its 30 million savers, this may have been their first tussle with a down market. Other investment platforms have reported similar long-term thinking and perspective among its customers in retirement accounts, suggesting a more disciplined investment mindset.