Here’s the average balance Americans held in their 401(k)s at the end of 2023. How does your nest egg compare?

Amidst economic uncertainty, Americans are tightening their belts and saving at a robust pace.

That’s according to a new report by the Bank of America Retirement and Personal Wealth Solutions and the Bank of America Institute.

The report found that the average balance in a 401(k) account surged 15% in 2023. Health Savings Account balances went up 11% over the same time period as well.

Given the pace of inflation — especially in contrast to wage growth — that might seem surprising. To understand how some Americans are managing to boost their savings in this economic climate, here’s a closer look at the underlying numbers.

Accelerated savings

In 2023, the average 401(k) balance was $86,280, according to the BoA Institute report. That’s 15% higher than the balance recorded at the end of 2022. Part of the reason for this is higher contributions, as roughly 18% of participants in the survey reported contributing more to their 401(k) account during this period.

However, the report highlights the fact that the increasing value of investments may have played a role too. The S&P 500 surged 24% in 2023, according to data collected by the Wall Street Journal. Many investors may have benefitted from this bull-run in the stock market if their 401(k) assets are allocated to mutual funds or exchange-traded funds.

Account balances in Health Savings Accounts (HSAs) also rose in 2023, bringing the average HSA balance to $4,380.

Just over one-third (37%) of HSA account holders contributed more that they withdrew from their account in 2023. Millennials were the most aggressive savers in this account. This cohort saved 34% of its contributions (rather than spending them) to their HSAs in 2023 — the highest savings rate of all the generations surveyed.

Given the name, it’s easy to believe that this account is designed just for emergency savings. However, that’s not the case. HSAs can also be used as an investment vehicle, allowing you to invest your funds in stocks or mutual funds to boost their value over time.

According to a new survey by the Plan Sponsor Council of America, only 19% of HSA account holders use their accounts to invest in 2022 — down from 21.5% the year before. The rest treat their HSA like a regular savings account, potentially missing out on some of the tax benefits and capital appreciation this account could offer.

If your 401(k) or HSA is falling behind the curve, here’s how you can maximize your savings and investments in 2024.

Boost your savings this year

The Internal Revenue Service has increased the total contribution room for 401(k) plans recently. In 2024, an individual employee can contribute up to $23,000 in the 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan. That’s a $500 increase from 2023.

HSA contribution limits have also been increased this year. An individual can contribute $4,150 to this account in 2024 — 7.8% more than the previous year. Meanwhile, a family can contribute $8,300, which is 7.1% higher than 2023.

Simply maximizing your contributions could potentially put you ahead of the pack. However, given the rising cost of living this might be easier said than done. Even a small contribution could give you an edge over many Americans. Nearly 41% of workers don’t contribute any money to a 401(k) or employer-sponsored plan, according to the latest CNBC Your Money Survey.

Another way to gain an advantage is to invest for growth. Instead of savings accounts or fixed income securities, consider mutual funds or low-cost index funds to boost your assets over time. The 401(k) and HSA are both designed to minimize or defer taxes on capital gains, under specific circumstances.