According to a study by Fidelity Investments, the overall average 401(k)/403(b) balance in the final quarter of 2020 was $121,500. With 2020 being a difficult year in many ways, including financially, about 1.6 million participants borrowed against their plans using the provision of the CARES Act, which allowed persons to take a loan of up to $100,000 twice the normal loan limit. Within the Fidelity platform, about 6.3% of those eligible took advantage of this offer.
More than 7,200 active and eligible ministers were enrolled in the Nazarene 403(b) plan in 2020, where CARES loans were limited to $25,000. Of these, 22 participants chose to take advantage of the government program to borrow a total of $245,000 from their accounts.
The report also indicates a third of 401(k)/403(b) holders increased savings in 2020, with Fidelity experiencing record contributions by women in the fourth quarter.
Contributions to the Nazarene 403(b) Retirement Savings Plan by individuals and churches reached $18.2 million in 2020. This was up slightly from $18 million in 2019. During 2020, Pensions and Benefits USA also deposited an additional $2.2 million in Annual Pension Supplements (APS) to the accounts of ministers whose churches contributed at least 50% or more of their annual P&B Fund allocations.
Despite the pandemic, the stock market saw significant gains in 2020, for the most part positively affecting retirement savings, including Nazarene 403(b) accounts, which grew by more than $100 million to $680 million.
The Nazarene 403(b) Retirement Savings Plan* through Fidelity Investments allows Nazarene ministers to set aside funds for the future tax-free. And when ministers take distributions at retirement, they may be received as tax-free housing allowance, subject to IRS limits. It’s an advantage not provided in standard 401(k) retirement plans or IRAs. If you’d like to learn more about investing for retirement through the Nazarene 403(b) Retirement Savings Plan, contact us at 888-888-4656 or email@example.com.
Also, find out how the amount you’ve set aside for retirement compares to that of others at your age in this article from CNBC.
*Note: Investing involves risk, including the risk of loss.