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Older Workers' 401(k) Balances Hitting Record Levels

If you've  contributed steadily to your 401(k) and didn't get scared off by the down economy and the wild swings of the stock market, chances are you're being rewarded now.

The average  401(k) balance reached $75,900 at the end of the third quarter, an 18 percent increase over a year ago, a new study by Fidelity Investments has found. That was its highest level since the company began tracking this data 12 years ago.

The news was even better for older workers: average balances were higher. Since most of us are interested to know how much others are stashing away, here's the average balance broken down by age:

-50 to 54        $110,600
-55 to 59        $132,500
-60 to 64        $130,700
-65 to 69        $134,100
-70-plus         $125,200

What's more, the study found that the older the plan participants were, the more they contributed. When it came to people in their 70s and older, it turns out that they socked away higher percentages of their earnings but still saved less than younger age groups, apparently because their wages were lower. It wasn't clear if that was from working fewer hours (maybe part-time or phased retirement) or due to other factors.

So much much did workers save? Those 50 to 54 contributed an average 9.1 percent of their earnings ($7,530); people 60 to 64 saved 10.6 percent ($7,970); 65 to 69 11.4 percent ($8,010); and 70-plus 12.1 percent ($6,750). (Experts often recommend that contributions--your own money plus any employer match--equal 10 to 15 percent of your pay.)

Not surprisingly, older workers who had contributed to their 401(k) plan for 10 consecutive years had the highest balances.

Here's that breakdown:

From 50 to 54        $ 223,500
From 55 to 59        $ 250,000
From 60 to 64       $ 233,700
From 65 to 69       $ 228,200
From 70 and up    $ 230,000

To come up with these figures, Fidelity analyzed 12 million 401(k) accounts in more than 20,200 corporate defined contribution plans.

Other slices of good news from the study:  employee contributions have grown over the last five years by 7.3 percent. And average annual employer contributions, sometimes called a company match, are also up, 19 percent since the third quarter in 2007, when the average figure was $2,880. That's particularly welcome news, since many employers during the recession stopped matching altogether or contributed less than they had before.

"It's encouraging to see companies making a greater contribution to their employees' 401(k) plans," James M. MacDonald, president of workplace investing at Fidelity, said in a statement. "We know a healthy employer match not only impacts employees' retirement savings but also has a positive impact on their behavior, ultimately leading to better outcomes."

While the savings contribution rates are going in the right direction, millions of us are still feeling ill-prepared for retirement. A study of 1,000 middle-income Americans, ages 25 to 75, finds that half say their most pressing financial concern is paying the monthly bills, up from 37 percent a year ago. Saving for retirement was in second place, the annual Wells Fargo Retirement Survey says.

More than half of pre-retirees say they are not confident they will have saved enough for the life they want in retirement, up from 42 percent percent in 2011. And nearly a third say they'll need to "work until at least 80," in order to live comfortably in their retirement years.

Yet interestingly, 73 percent say their employer would not want them to work in their 80s.

Photo credit:  MJ/TR via

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