Savings: Despite turbulent markets and economic uncertainty in early 2025, American workers are staying committed to their retirement goals—setting a new record for 401(k) savings rates, according to Fidelity Investments’ latest quarterly analysis.
Fidelity, the largest provider of workplace retirement plans in the U.S., reported that while average retirement account balances dipped slightly in the first quarter, both employee and employer contributions surged.
The total average 401(k) savings rate climbed to 14.3%, its highest level ever, nearing Fidelity’s recommended 15% benchmark. That figure combines a 9.5% employee contribution with a 4.8% employer match.
Balances Down, But Contributions Up
The average 401(k) balance fell 4% to $121,983, primarily due to stock market volatility.
Similarly, IRA balances dropped 2% to $115,424, while 403(b) accounts declined 3% to $127,100. Fidelity attributed these declines to market swings amid recession concerns and fluctuating federal trade policies.
Still, Americans showed resilience and a long-term mindset. The report revealed:
- 17% of 401(k) participants increased their contribution rates
- IRA contributions rose 4.5% year-over-year to an average of $3,231
- Baby Boomers boosted their IRA contributions by 21% to an average of $5,272
Notably, only 5% of savers decreased their 401(k) contributions, and just 6% changed their asset allocations—indicating most are staying the course.
Expert Encouragement for Long-Term Focus
“Although the first quarter of 2025 posed challenges for retirement savers, it’s encouraging to see people take a continuous savings approach focused on long-term goals,” said Sharon Brovelli, President of Workplace Investing at Fidelity Investments.
“This mindset helps individuals weather any type of market turmoil and stay on track for retirement.”
The report also highlighted a gap in retirement preparedness: 84% of Americans say they don’t know how long their savings will last, and many express concern about protecting their nest eggs from inflation.
A Smart Strategy Pays Off
With economic pressures mounting, including a 0.3% drop in GDP in Q1 and renewed recession warnings, the commitment to steady retirement savings may prove crucial.
Financial advisors continue to emphasize the importance of consistency, especially during volatile times.
While retirement balances may fluctuate with the market, Americans are showing financial discipline, boosting contributions, and staying focused on the future. That long-term strategy could make all the difference in building a secure retirement.