Adding Up the 401(k) Savings

Much of the discussion around retirements is rightfully focused on the large numbers of people who are not saving enough. But The Washington Post recently shared some positive information:

The number of workers with $1 million or more in their 401(k) increased to 157,000 at the end of the first quarter this year, an increase of 45 percent compared with the same time a year earlier, according to Fidelity Investments, one of the country’s largest administrators of workplace retirement accounts.

“There’s no doubt that many of Fidelity’s 401(k) millionaires have benefited from the market’s positive performance, but they also exhibit many of the behaviors we recommend to make the most of your savings,” said Jeanne Thompson, senior vice president for Fidelity. “They contribute enough to get their full company match, they’re less likely to take 401(k) loans, they don’t cash out when changing jobs and they invest for growth — on average, 401(k) millionaires hold 76 percent of their savings in equity mutual funds.”

Workers can now contribute up to $18,500 each year to a workplace plan such as a 401(k) or the federal government’s Thrift Savings Plan (TSP). If you’re over 50, there’s a catch-up provision that allows you to contribute up to $24,000 to an employer-sponsored retirement plan.

Fidelity’s analysis of first quarter data also found the following.

  • Workers who have saved in their company’s 401(k) for 10 years had a record high average account balance of $290,100, compared with $250,500 a year ago.
  • Those employees who have saved for 15 years had an average balance of $379,600, up from $330,200 a year ago.

“Although found at many grade levels and in nearly every agency throughout the country, all of the people in the million-plus column have the same things in common: they have invested for the long haul, and invested heavily or exclusively in the stock-indexed C and S funds,” Mike Causey of Federal News Radio wrote. “When markets drop dramatically — as they did in 1997 and during the Great Recession — they continue to purchase stocks getting more shares each pay period because they are investing the same amount of money, which purchases a larger share of the C and S funds. Also, all of those eligible for it have taken advantage of the total 5 percent match available from their agency.”

Transportation: Roads Lead to Different Conclusions

The Rockefeller Foundation has a $66 million transportation initiative "aimed at promoting equitable and sustainable transportation policies at the federal and state level."

Its recent survey, released yesterday, carries the following headline: Rockefeller Foundation Infrastructure Survey Reveals Bipartisan Support for Transportation and Infrastructure Investments and Reform. The subhead (in the effort to construct the longest lead-in to a press release in history adds: Four in five voters agree that federal funding to improve and modernize transportation will boost local economies and create jobs.

There’s actually another one-liner about the intent of the initiative before the study results are revealed. The final point of four key findings asserts that "American voters are open to several funding streams for national transportation projects."

In contrast, The Washington Post headlined its Monday story (prior to the poll’s release) with this headline: Rockefeller Foundation survey: Americans rank transportation needs high but don’t want to pay the costs.

Its story emphasized:

  • 78 percent of those surveyed say private investors should be tapped to rebuild the country’s aging infrastructure
  • 71 percent opposed a tax increase, 64 percent were against new tolls on existing roads and bridges, and 58 percent said no to paying for each mile they drive

Good information from both on a critically important issue (in fact, the Chamber’s BizVoice magazine will tackle transportation and paying for infrastructure improvements in its May-June issue). Just a radically different approach on what to focus on.