Page 25 - AT

BUSINESS Monday 13 May 2019
A25

What market tumble? Workers up 401(k) savings to record

By STAN CHOE ter every one of its past
Associated Press downturns. Following the
NEW YORK (AP) — Last last severe drop, of 56.7%
year’s tumble for the stock from 2007 into 2009, it took
market wasn’t enough to roughly six and a half years
scare workers off of sav- for the S&P 500 to get back
ing for retirement. Instead, to its record level.
many ended up saving More savers are now using
more. a special type of mutual
Even after a nearly 20% fund that can help with the
plunge for the S&P 500 rat- temptation to sell out of
tled nerves at the close of stocks. Target-date retire-
2018, workers upped their ment funds take care of
contributions into 401(k) the investment decisions
accounts in the ensuing for savers, including how
months. The average work- much of a nest egg to put
er set aside a record $2,370 into stocks and how much
during the first quarter, up to put into bonds. More
15% from a year earlier, ac- than half of all savers at Fi-
cording to Fidelity Invest- delity now have all of their
ments. Not only that, em- 401(k) account in a target
ployers increased their own In this Nov. 15, 2017, file photo, new $1 bills with the signatures of U.S. Treasurer Jovita Carranza date fund. That rate of 52%
contributions to a record and Treasury Secretary Steven Mnuchin are cut and stacked at the Bureau of Engraving and is up sharply from 16% a
average of $1,780. Printing in Washington. decade earlier, when the
“I’ve been in this industry Associated Press stock market finally hit bot-
for almost 20 years, and we closest they’ve ever come prices were storming higher 403(b) accounts had simi- tom following the 2008 fi-
have been consistently say- to Fidelity’s recommenda- early this year, as worries lar gains, up to averages nancial crisis.
ing that if you have access tion of setting aside 15% for about a possible recession of $107,100 and $85,800, Workers who have access
to a 401(k) or a 403(b), you retirement, including any receded, and the S&P 500 respectively. to a 401(k) plan often have
should take a long-term employer match. had its best first quarter Retirement experts have higher incomes than other
view,” said Katie Taylor, Many factors were likely since “Titanic” was pulling long asked workers to stay Americans, which is a fac-
vice president of thought behind the increase, Tay- in moviegoers in 1998. the course when it comes tor in their increasing bal-
leadership at Fidelity Invest- lor said. Some workers may Those gains, plus workers’ to their savings. The stock ances. But Taylor said she’s
ments. “It’s really encour- have reassessed their sav- additional contributions, market tends to have steep seeing improvements for
aging that people are do- ings after filing their tax meant the average 401(k) drops of 20% or more ev- savers along the income
ing that now. That we have returns. Others may have account balance stood ery six or seven years, and scale. “A lot of people
savings rates going up, em- unwittingly raised their con- at $103,700 at the end of temptation can be high in think you have to make a
ployers adding more, it’s all tributions, because em- March, according to Fidel- such moments to sell out lot of money to save a lot
great news.” ployers sometimes set plans ity. That’s up from $95,600 of stocks to protect what- of money,” she said, “but
Altogether, workers saved to automatically increase at the start of the year and ever’s left in the nest egg. many people who make
an average of 13.5% of their savings rates unless workers $102,900 a year ago. But the stock market has less than $100,000 are do-
pay during the first three opt out of it. Balances for individual re- — eventually — gone on ing very well saving 10% to
months of 2019. That’s the It didn’t hurt that stock tirement accounts and to recover all its losses af- 15% for retirement.”q

US government records $160.3 billion April surplus

By MARTIN CRUTSINGER domestic and military pro- for individuals to pay tax
Associated Press grams. bills.q
WASHINGTON (AP) — The The Congressional Budget
federal government re- Office is projecting that the
corded a $160.3 billion sur- deficit this year will climb
plus in April as revenues for to $896 billion, smaller than
the month jumped to an the administration’s $1.1
all-time high. trillion forecast but still 15%
But even with a flood of tax higher than last year.
receipts, the deficit so far The CBO shows slightly
this year is running 37.7% smaller deficits in the short-
higher than a year ago. term, projecting that they
The Treasury Department will remain below $1 trillion
reported Friday that the through 2021 but after that
deficit for the first seven This April 18, 2019, file photo shows the dome of the U.S. Capitol will top $1 trillion and will re-
months of the budget year in Washington. On Friday, April 10, the Treasury Department main above the $1 trillion
that began Oct. 1 totals releases federal budget data for April. mark for the rest of the de-
$530.9 billion, compared Associated Press cade.
to a deficit of $385.5 billion deficit of $779 billion. The deficits have increased While the government runs
for the same period a year The administration is pro- following congressional deficits in most months,
ago. jecting the deficit will stay passage in December 2017 April has been a surplus
The Trump administration above $1 trillion for four of a $1.5 trillion tax cut pro- month for 60 of the past 65
projected in March that straight years before start- moted by President Donald years, reflecting the flood
this year’s deficit will hit $1.1 ing to decline for the rest of Trump as well as a boost of revenue that comes in
trillion, up from last year’s the decade. last year in spending on with the annual deadline