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FIDELITY REPORTS SURGE IN IRA ACCOUNTS

 FIDELITY REPORTS SURGE IN IRA ACCOUNTS
 BOSTON, Feb. 10 /PRNewswire/ -- Fidelty Investments, a leading


manager of retirement savings for individuals and institutions, reports a surge in its retirement business. Investors are opening new IRA accounts at a faster rate than at any time since 1986/87, when IRAs were in their heyday, said Roger Servision, president of Fidelity Retail Services.
 The trend began during the second half of last year, when IRA inflows surged ahead of first-half levels. "With this kind of momentum going into the traditional IRA funding season, we expect to more than double last year's business in IRAs," Servison noted. Traditionally, the first four months of the year leading up to the tax deadline attract the highest volume of contributions to retirement accounts. Interest Rate Decline
 Servison identified several factors contributing to the boom in Fidelity's retirement business. The first is the drop in interest rates starting in 1991, which caused consumers to look beyond certificates of deposit, a traditional choice for IRAs. Retirement investors are increasingly turning to Fidelity's stock mutual funds, which have received a higher share of IRA investments at the firm in the last two years. The move into stocks for retirement intensified in January, when investors directed a record 78 percent of new IRA deposits to stock mutual funds.
 "The shift to equities for IRAs makes send for most retirement investors," Servison said. "People who want to have a comfortable retirement 20 or more years down the road need to have a portion of their assets in the stock market," he said. "Historically stocks are the only investment that has outperformed inflation." Baby Boomers Save
 Another factor behind the IRA boom at Fidelity may be the long-predicted shift to a savings mentality by consumers. "It's as if Americans got their wake up call to think more long-term about their finances and plan more aggressively for their retirement," Servison said. "It bears out what demographers have been forecasting -- that as more baby boomers hit their mid-40s, we'll see a fundamental economic shift from spending toward saving and investment."
 A Fidelity/Gallup year-end 1991 Poll correctly forecasted consumers' intentions to add more to their retirement savings this year, with 37 percent saying that they will add more to their retirement savings than they did last year. Among younger consumers, the intention to add more to retirement savings was even stronger. Nearly one-half of consumers under 50 planned to increase their retirement savings this year, compared with 24 percent of those over 50. Reflecting this trend, Fidelity has received 100,000 requests for its Common Sense Guide to Planning for Retirement over the last year. Recession Effect
 The psychological and economic impact of the recession has also affected retirement savings. "Given the corporate restructurings, lay-offs and economic uncertainty in the workplace, consumers realize that they need to be responsible for their own future and build retirement savings," Servison said.
 One of the results of corporate restructurings is that increasing numbers of exiting employees are rolling over their retirement plan money to IRAs. By putting the retirement savings that they accumulated in their company plans into a rollover IRA, they escape taxes and penalties. Servison said that Fidelity's Consumer's Guide to Taking Your Retirement Money has attracted more than 50,000 requests on the firm's 24-hour toll-free line (1-800-544-8888) in the past year.
 Fidelity Investments, a mutual fund and brokerage firm, manages more than $165 billion in assets for individuals, corporations and tax-exempt institutions with an additional $50 billion in customer brokerage accounts. Headquartered in Boston, Fidelity has 66 walk-in investor centers across the country to serve the needs of individual investors.
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 /CONTACT: Fidelity Public Relations, 617-570-5900/ CO: Fidelity Investments ST: Massachusetts IN: FIN SU:


EG-SH -- NE015 -- 8280 02/10/92 12:30 EST
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Publication:PR Newswire
Date:Feb 10, 1992
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