More tap into retirement savings, Fidelity says
The average 401(k) account balance as of the end of the second quarter was $61,800, up 15 percent from the same time last year, but down from the end of the first quarter of 2010, said Fidelity Investments in a report on retirement savings plans.
But hard times led to an increase in consumers initiating loans or making hardship withdrawals from their retirement savings, Fidelity said.
"Loans initiated over the past 12 months grew to 11 percent of total active participants from about 9 percent one year prior," Fidelity said in a press release.
The Boston company may be best known for its mutual funds, but it is also a provider of workplace retirement savings plans.
The survey found that the average age of those taking a loan or hardship withdrawal is between 35 and 55 years old - a worker's peak earning years, the release said.
"The majority of participants continue to make saving through their workplace plans a priority," James M. MacDonald, Fidelity's president of workplace investing, said in a statement. "However, the current economy has forced some workers to borrow from their 401(k) accounts in order to pay for critical living expenses, ultimately jeopardizing their future retirement."
Comment
Permalink
E-mail
