Retirement Savers Stay the Course
Total 401(k) savings rates
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%.
Average long-term balances
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.
Employee investing behaviors
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%).
IRA contributions continue to increase
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).
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
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.
