Despite stock market turbulence in the first quarter, Americans continued to prioritize their retirement savings, according to Fidelity Investments’ latest analysis of over 50 million retirement accounts. The findings reveal small declines in average retirement account balances, but strong saving habits remained consistent among workers.
First-Quarter Decline in Account Balances
The first quarter of 2025 saw a dip in average balances across 401(k), IRA, and 403(b) accounts. The average 401(k) balance decreased by 3% to $127,100. Meanwhile, IRA accounts saw an average balance of $121,983, a 4% drop, and 403(b) accounts dropped by 2% to $115,424. Fidelity attributed these declines to “market swings” during a turbulent period for financial markets.
Steady Retirement Contributions
Despite market volatility, retirement savings rates remained strong. The average employee contribution rate for 401(k) accounts hit 9.5%, with employer contributions at 4.8%, leading to a combined 14.3% savings rate—the closest it has ever been to Fidelity’s recommended 15%. Similarly, 403(b) account holders saved an average of 11.8%. This demonstrates a consistent commitment to long-term retirement goals, even during uncertain times.
Increased Contributions Despite Market Challenges
During the first quarter, 17.4% of 401(k) holders increased their contributions, while only 4.9% reduced them. Additionally, 14.6% of 403(b) holders raised their contribution rates. Fidelity’s analysis shows that despite external challenges, retirement savers continued to prioritize their future financial security.
Minimal Changes to Asset Allocation
In terms of asset allocation, only a small percentage of individuals made changes to their retirement portfolios. Just 6% of 401(k) holders and 4.7% of 403(b) holders altered their allocations during the first quarter, suggesting that many savers stayed focused on their long-term strategy, regardless of short-term market fluctuations.
Increased IRA Contributions
Fidelity also reported a 4.5% increase in IRA contributions compared to the same period in 2024, showing that individuals are continuing to build their retirement funds across various types of accounts. This is in line with the broader trend of prioritizing savings despite economic uncertainty.
Public Confidence in Retirement Savings
A separate Gallup survey found that 59% of U.S. adults have funds set aside in a retirement savings account. Of those still in the workforce, 50% feel confident that they will have enough to live comfortably in retirement. This reflects growing optimism about the future, despite concerns over market volatility.
