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401(k) savings rates remain steady in Q4 2022, average balances drop below $100,000

Yahoo Finance Live hosts examine the latest 401(k) data published by Fidelity.

Video Transcript

- All right. Well, it has been a year of volatility in the markets. One place Americans might have taken notice is their retirement accounts. 401(k) balances dropping below $100,000. That's according to data from Fidelity. The average balance in the third quarter is just over $97,000. That's a 23% drop from just a year ago. And Rachelle, when we dig into some of these other numbers, I guess the silver lining in this report is that the majority of retirement savers do still contribute to their 401(k).

The average 401(k) contribution rate, which includes the employer and employee contributions, that totaled 13.9%, just shy of Fidelity's suggested rate of 15%. So when you take all of that into account, at least the majority of people-- I'm trying to find the positive news here-- are still contributing to their retirement, which we know is so important here when you're planning for your retirement years.

- It is because you don't want to panic and take your money out early and then you have that tax penalty waiting for you. And as we heard from our guest Deborah earlier, she was saying, look, if you have a longer time horizon, just wait it out. Wait for the market to come back up. But I do understand that, obviously, it's more stressful if you're right up against that retirement line. But, I mean, it's understandable as we're seeing these drops. We've seen the broader market sell off. But, hopefully, people can hang on if they're not right up against that retirement line.