Finance

401(k) savers stayed on course through market volatility, Fidelity found

Published

11 months ago

June 5, 2025

401(k) savers stayed on course through market volatility, Fidelity found

Retirement savers weathered a chaotic stretch of market gyrations in the first three months of the year, consistently adding to their savings, according to Fidelity Investments’ quarterly analysis.

While they experienced a drop in average 401(k), 403(b), and IRA balances, mostly due to market swings, savings rates remained consistent, with the average 401(k) savings rate increasing to a record 14.3%.

“We saw a lot of positive savings behaviors among employees,” Michael Shamrell, vice president of workplace thought leadership at Fidelity Investments, told Yahoo Finance.

“It was really encouraging to see that despite a lot of things going on, and economic ups and downs, people continued to save and didn’t pull back, or make a lot of changes to their asset allocation,” he said. “As a result, we saw the individual 401(k) savings rate increase to the highest level that we’ve seen.”

To break it down, the average employee contribution rate was 9.5%, and the employer contribution rate was 4.8%. This combined savings rate of 14.3%, up from 13.5% in 2020, is the closest it’s ever been to Fidelity’s suggested savings rate of 15%.

“For years, the individual savings rate was stuck at 8%,” Shamrell said.

Overall, average 401(k) retirement account balances dropped 3% through the first three months of this year to an average of $127,100 from $131,700 at the end of 2024. This was the second-highest average on record for the firm and an 11% increase from the start of 2024.

The data is based on 25,300 defined contribution plans at various companies across the country, covering 24.4 million participants.

Read more: How much can you contribute to your 401(k) in 2025?

In the first quarter, 17.4% of people with 401(k) accounts at Fidelity increased their savings rate, while 5% decreased. Less than 1% stopped saving altogether.

Surprisingly, only 6% changed their 401(k) asset allocation. Of those who did, about 3 in 10 moved into more conservative investments.

There are two big drivers.

First, automatic enrollment in employer-provided retirement accounts for new employees and auto-escalation each year keep the trains running through all kinds of uncertainty.

More than 1 in 4 plans now offer employer-set automatic escalation, and 35% of plans default to automatically enrolled employees at a 5% contribution rate or higher, according to Fidelity data, with an annual 1% increase until reaching roughly 10% of pay.

“The increasing use of auto escalation is a big factor in why we are seeing a gradual increase in the individual savings rate,” Shamrell said.

Employees, of course, can opt out, but rarely do.

More than two-thirds of the individuals who increased their 401(k) contribution rate in the first quarter used the auto increase feature in their plan, according to Shamrell.

The second big force helping retirement savers stay calm is the marvelous target-date fund.

More than 6 in 10 Fidelity 401(k) participants had all of their savings in a target-date fund.

“That number’s even higher among Gen Z — 81% — as you can imagine, because they’re a generation where a lot of them have been automatically enrolled in these funds,” Shamrell said.

Nearly all 401(k) plan sponsors, including Fidelity, use target-date funds when they automatically enroll workers in a retirement plan.

With a target-date retirement fund, you choose the year you’d like to retire and buy a mutual fund with that year in its name (like Target 2044). The fund manager allocates your investment between stocks and bonds, typically made up of index funds, tweaking that to a more conservative mix as the target date nears.

Target-date funds help 401(k) participants automatically rebalance when markets shift and as they near retirement age, and they go a long way in helping people navigate uncertain markets with some peace of mind knowing that their portfolios are well-diversified and designed for long-term investing for retirement.

“They can really prevent people from going in and tinkering if they get worried,” Shamrell said.

Have a question about retirement? Personal finances? Anything career-related? Click here to drop Kerry Hannon a note.

Reaching a million-dollar-plus balance was not such an easy ride. In the first quarter, 512,000 savers had at least $1 million in their 401(k), down from 537,000 at the end of last year.

“The number of people who hit the millionaire milestone swings with the market, either up or down,” Shamrell said.

These millionaires make up a small percentage of Fidelity’s 401(k) participants, he added.

“That millionaire number, whether it’s a million-dollar lottery ticket or a million-dollar home, it just seems to be something people really view as aspirational. We’re not saying that once you get to a million, you’re done. It’s one threshold to aim for in terms of your savings efforts.”

Who are these super savers? The average savings tenure across Fidelity’s millionaire population is about 27 years, Shamrell said.

“Let’s think back to 27 years ago, that was 1998, and all the things that this population has seen — from the rise and fall of the dot-com to 9/11, to the global housing crisis, to a global pandemic. They’re really great examples of staying the course. One of the main characteristics is that they save consistently,” he said.

And they save aggressively. Their average individual savings rate is about 17.6%. If you add in the employer match it totals 26.2%.

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming “Retirement Bites: A Gen X Guide to Securing Your Financial Future,” “In Control at 50+: How to Succeed in the New World of Work” and “Never Too Old to Get Rich.” Follow her on Bluesky.

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Finance

BofA revises Harley-Davidson stock price after latest announcement

Published

9 hours ago

May 9, 2026

Press Room

BofA revises Harley-Davidson stock price after latest announcement

Harley-Davidson’s new CEO wants to transform how people think about the iconic motorcycle brand, so the company is trying something different.

This week, Harley announced a new strategy that focuses on lower-priced bikes, rather than relying on older, more affluent customers to buy its higher-margin touring models.

“Back to the Bricks builds on our core strengths and competitive advantages, harnessing the passion of our riders to deliver profitable growth for the Company and both our dealers and shareholders,” Harley CEO Artie Starrs said this week. “As we drive towards this new phase of growth, we remain committed to the craftsmanship and dedication that define our brand.”

Entry-level Harley-Davidsons cost about $13,000, while the higher-end Adventure Touring models average about $23,250, and the Premium Range &CVO models cost about $38,500, according to Reuters.

Harley’s new strategy targets a core profit of over $350 million from its motorcycle business by 2027 and over $150 million in cost reductions.

To kick off the new strategy, Harley is introducing Sprint, a new entry-level model powered by a smaller 440cc engine, later in the year.

Harley-Davidson is going after a younger demographic with its new strategy. Photo by Raivo Sarelainens on Getty Images

What is Harley-Davidson’s “Back to the Bricks” strategy?

Harley’s new strategy relies on more than just pushing buyers toward cheaper vehicles to increase volume. The 123-year-old company has a set of five pillars on which it is building its future.

Harley-Davidson “Back to the Bricks” 5-point plan

Deep appreciation of Harley-Davidson’s competitive advantages and legacy: The Company’s iconic brand, diversified and powerful revenue channels, and best-in-class dealer network provide a powerful foundation for growth.
Renewed commitment to exclusive dealer network to drive enterprise profitability: Harley-Davidson’s dealers are a competitive advantage. The Company is planning actions to enable dealers to double profitability in 2026 and then double it again by 2029.
Immediate actions to recapture share in areas where Harley-Davidson has right to win: Harley-Davidson has strong legacy equity in existing markets including new motorcycles, used motorcycles, Parts & Accessories, and Apparel & Licensing. The Company’s new strategy is focused on positioning the Company to regain share and drive meaningful volume growth in categories where it benefits from credibility, scale, and deep rider connection.
Strong financial position with a path to stronger free cash flow and EBITDA margin: Cost and restructuring actions already underway support a path to stronger free cash flow and EBITDA margin over time.
Bolstered management team with balance of fresh perspectives and institutional knowledge: Harley-Davidson has made a number of leadership appointments that support the Company as it leverages its innate strengths.

Finance

What is Considered a Good Dividend Stock? 2 Financial Stocks That Fit the Bill

Published

21 hours ago

May 9, 2026

Press Room

What is Considered a Good Dividend Stock? 2 Financial Stocks That Fit the Bill

Source: Getty Images

Written by Jitendra Parashar at The Motley Fool Canada

Dividend investing can be one of the simplest ways to build long-term wealth while creating a steady stream of passive income. But in my opinion, a good dividend stock is about much more than just a high yield. Beyond dividend yield, investors should also look for companies with durable businesses, reliable cash flows, and a history of rewarding shareholders consistently over time.

That’s exactly why many investors turn to financial stocks. Banks and asset managers often generate recurring earnings through lending, investing, and wealth management activities, allowing them to support stable dividend payments even during uncertain market conditions.

Two Canadian financial stocks that stand out right now are AGF Management (TSX:AGF.B) and Toronto-Dominion Bank (TSX:TD). Both companies offer attractive dividends backed by solid financial performance and long-term growth strategies. In this article, I’ll explain why these two financial stocks could be worth considering for income-focused investors right now.

AGF Management stock continues to reward shareholders

AGF Management is a Toronto-based asset manager with businesses across investments, private markets, and wealth management. Through these divisions, the company offers equity, fixed income, alternative, and multi-asset investment strategies to retail, institutional, and private wealth clients.

Following a 59% rally over the last 12 months, AGF stock currently trades at $16.67 per share with a market cap of roughly $1.1 billion. At current levels, the stock offers a quarterly dividend yield of 3.3%.

One reason behind AGF’s strong recent performance is its increasingly diversified business model. The company has expanded its investment capabilities and broadened its geographic reach, helping it perform well across varying market environments.

In the first quarter of its fiscal 2026 (ended in February), AGF posted free cash flow of $36 million, up 14% year over year (YoY), driven mainly by higher management, advisory, and administration fees. These fees climbed to $92.5 million as demand for the company’s investment offerings strengthened.

AGF has also been focusing on expanding its alternative investment business and introducing new investment products. With strong cash generation and growing demand for alternative investments, AGF Management looks well-positioned to continue rewarding investors over the long term.

TD Bank stock remains a dependable dividend giant

Toronto-Dominion Bank, or TD Bank, is one of North America’s largest banks, serving millions of customers through its Canadian banking, U.S. retail banking, wealth management and insurance, and wholesale banking operations.

Following a 70% jump over the last year, TD stock currently trades at $148.14 per share and carries a massive market cap of $247 billion. It’s also continuing to provide investors with a quarterly dividend yield of 3%.

TD’s latest results show why it remains a dependable dividend stock. In the February 2026 quarter, the bank’s reported net income jumped 45% YoY to $4 billion, while adjusted earnings rose 16% to a record $4.2 billion.

Similarly, the bank’s Canadian personal and commercial banking segment delivered record revenue and earnings with the help of higher loan and deposit volumes. Meanwhile, its wealth management and insurance business also posted record earnings, while wholesale banking benefited from strong trading and fee income growth.

Notably, TD ended the quarter with a strong Common Equity Tier 1 capital ratio of 14.5%, giving it a solid capital cushion. While the bank continues to spend on U.S. anti-money-laundering remediation and control improvements, its strong earnings base, large customer network, and diversified operations continue to support its dividends.

The post What is Considered a Good Dividend Stock? 2 Financial Stocks That Fit the Bill appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

2026

Finance

UK watchdog says car finance legal challenge hearing unlikely before October

Published

1 day ago

May 8, 2026

Press Room

UK watchdog says car finance legal challenge hearing unlikely before October

Britain’s financial watchdog said on Friday a tribunal hearing on ‌legal challenges to its compensation scheme for mis-sold car loans was unlikely before October, and told lenders to prepare for a possibility that the scheme could be scrapped entirely.