Quarterly summary
This quarter, retirement savers experienced a drop in average 401(k), 403(b), and IRA balances, primarily due to market swings. Encouragingly, savings rates remained consistent, with the average 403(b) savings rate holding at 11.8%; the average 401(k) savings rate increased to a record 14.3%.
Average retirement account balances
Retirement savers stay the course
9.5%
employee contribution rate
Hit a record high in Q1, driven by a milestone employee contribution rate of 9.5%, and an employer contribution rate of 4.8% - the highest level to date. This combined savings rate of 14.3% is the closest it’s ever been to Fidelity's suggested savings rate of 15%.
19.7%
increase in account balance for 5-year savers
While long-term account balances dipped slightly from last quarter, balances increased from one year prior, led by 5-year continuous savers who saw an increase of 19.7% over the past year.
16.8%
workers contributing to a Roth 401(k)
The percentage of workers contributing to a Roth 401(k) increased to 16.8% in the first quarter (up from 15.2% one year ago), while the percentage of individuals initiating a new 401(k) loan dropped slightly from one year ago (2.3% vs. 2.4%).
4.5%
increase in IRA contributions
Despite a slight drop in the average account balance, IRA contributions have increased 4.5% from a year ago ($3,231 vs. $3,093). This is particularly notable for Baby Boomers, where average contributions went up 21% from Q1 last year ($5,272 vs. $4,348).
“Although the first quarter of 2025 posed challenges for retirement savers, it’s encouraging to see people take a continuous savings approach which focuses on their long-term retirement goals. This approach will help individuals weather any type of market turmoil and stay on track to reach their retirement goals.”
Sharon Brovelli,
President of Workplace Investing at Fidelity Investments
Spotlight: Q1 market volatility
During times of market volatility, Fidelity encourages participants to “stay the course” with their savings to help weather the economy’s ups and downs. Despite the market swings of Q1, retirement savers stayed consistent with their savings, with most continuing to contribute and invest in stock.
17.4%
Increased their 401(k) contribution rate
4.9%
Decreased their 401(k) contribution rate
6%
Changed their 401(k) asset allocation
14.6%
Increased their 403(b) contribution rate
3.5%
Decreased their 403(b) contribution rate
4.7%
Changed their 403(b) asset allocation
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¹ Fidelity business analysis of 17.3 million IRA accounts as of March 31, 2025. Considers only active participants with balance.
² Fidelity Investments Q1 2025 401(k) data based on 25,300 corporate defined contribution plans and 24.4 million participants as of March 31, 2025. These figures include the advisor-sold market but exclude the tax-exempt market. Excluded from the behavioral statistics are non-qualified defined contribution plans and plans for Fidelity’s own employees.
³ Fidelity Investments Q1 2025 403(b) data based on 10,719 Tax-exempt plans and 9.0 million plan participants as of March 31, 2025. Considers average balance across all active plans for 6.63 million unique individuals employed in tax-exempt market.
Keep in mind that investing involves risk, including the risk of loss. The value of your investment will fluctuate over time, and you may gain or lose money.
Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.
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