For the first time ever, Gen X workers saw their 401(k) balances top those of Baby Boomers, Fidelity data showed.
Balances for Gen X workers who’ve been saving for 15 years averaged $543,400, $200 more than Boomers’, according to the financial service firm’s analysis of its more than 22 million accounts in the first three months of the year. Gen X, born between 1965 and 1980, is the next generation to retire behind the Boomers born between 1946 and 1946 retiring now.
Gen X is often referred to as the forgotten generation, sandwiched between the large and culturally powerful Boomers and Millennials. It’s also the first generation to start working as 401(k)s replaced pension plans. Surveys have shown many of them don’t have nearly enough for retirement, but Fidelity’s report shows some green shoots.
If the trend continues, that’s “a good thing all around,” said Mike Shamrell, Fidelity’s vice president of workplace thought leadership.
What’s driving the trend?
Two things, Shamrell said.
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- Boomers are retiring so they’re not contributing to their nest egg and, instead, drawing down their 401(k) savings, as they should.
- Simultaneously, Gen X is approaching retirement, so they’re more aggressively saving as much as they can.
In fact, Gen X on average saved more of their annual pay than even what Fidelity recommends. Fidelity suggests workers save 15% of their paycheck, including employer contributions,…
