By age group, the average balance for Baby Boomers was $241,200; Gen Xers make $178,500, while Millennials make $59,800. And for Gen Z, it’s $11,300.
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But when comparing the balance Savings rates by industry could help savers get a more accurate picture of how they compare to other workers.
Fidelity has compiled industry data to help companies that participate in its 401(k) platform better understand their employees’ savings behavior, according to Mike Shamrell, vice president of workplace investing thought leadership at Fidelity.
“There are still a lot of companies out there that are really competing for talent,” Shamrell said, adding that for those companies, 401(k) plans are often used as a recruiting tool.
“They want to make sure what they’re doing is consistent with the companies that are competing for talent,” Shamrell said.
He noted that industries with higher salaries also tend to have higher average 401(k) plan balances.
Legal services topped the list with an average 401(k) balance of $306,400.
Petrochemicals came in second with $255,500, followed by energy production/distribution with $214,400.
The industries with the lowest average 401(k) balances were retail ($51,200), health care excluding physicians ($66,600) and real estate ($70,700).
Experts say a better measure of a worker’s success with retirement savings is their total savings rate, not their balance. Fidelity typically advises workers to aim to save 15% of their pretax income, including employer contributions, for retirement.
Overall, Fidelity’s 401(k) participants’ average total savings rate, including employee and employer contributions, was 14.2%, the closest to the company’s recommended savings rate to date.
While workers often get distracted by the idea of how much they need to save to retire (a recent survey by Northwestern Mutual suggests people think they need $1.46 million to live comfortably in retirement), experts say it’s generally best to focus on a consistently high savings rate.
Industries with the highest gross savings rates include pharmaceuticals (gross savings rate 19.7%), petrochemicals (19.1%) and aviation (18.4%).
Industries with the lowest average total savings rates include retail trade (10.4%), health care excluding physicians (10.9%), and construction and science and technology (12.3% each).
Of course, a higher overall savings rate can be achieved with generous help from your employer: According to Fidelity, the overall average employer contribution rate is 4.8%.
The industries with the highest employer contribution rates are petrochemical (8.2%), pharmaceutical and aviation (7.8% each).
The industries with the lowest employer contribution rates are non-physician healthcare (2.9%), retail trade (3%), and science and technology (3.1%).
To be sure, when investors take out 401(k) loans, as 17.8% of Fidelity plan participants do, it can reduce their progress toward saving for retirement.
