Retirement account balances experienced a decline in the first quarter of 2025, largely due to fluctuations in the stock market. Nonetheless, individuals continued to contribute to their retirement savings, as revealed by the latest analysis from Fidelity Investments.
The financial services firm examined over 50 million retirement accounts and reported that average balances across 401(k), IRA, and 403(b) accounts all recorded slight decreases during the first three months of the year.
Fidelity’s Q1 2025 retirement analysis indicates that the average balance of 401(k) accounts fell by 3% from the previous quarter to $127,100.
Meanwhile, average balances for IRA accounts stood at $121,983, while 403(b) accounts averaged $115,424, reflecting declines of 4% and 2% from the previous quarter, respectively.
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Fidelity attributed these declines primarily to “market swings” triggered by uncertainties related to tariffs and other policy concerns impacting popular index funds.
Despite this volatility, Fidelity noted that the rate of retirement savings remained robust. Employee contribution rates for 401(k) accounts reached 9.5% during the quarter, with employer contributions averaging 4.8%.
The combined savings rates for 401(k) accounts totaled a record 14.3%, nearing Fidelity’s recommended savings target of 15%, according to the firm. Additionally, participants in 403(b) plans maintained an average contribution rate of 11.8%.
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According to Sharon Brovelli, president of workplace investing at Fidelity, “Despite facing challenges during the first quarter of 2025, it’s encouraging to see individuals maintaining a consistent savings strategy focused on long-term retirement goals.” This method is seen as key to navigating market tumult and achieving retirement objectives.
In a climate of market uncertainty, 17.4% of 401(k) holders opted to increase their contributions, while only 4.9% reduced theirs, the report highlights.
Additionally, 14.6% of 403(b) participants increased their contribution rates in the same period.
Alterations in asset allocation during the first quarter were minimal, with only 6% of 401(k) account holders making changes and 4.7% for those with 403(b) accounts.
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Fidelity’s report also revealed that IRA holders increased their contributions by 4.5% compared to the previous year’s first quarter. A recent Gallup survey indicated that 59% of U.S. adults possess funds in a retirement savings account.
Among active workers with retirement savings plans, half reported confidence that they would have sufficient funds for a comfortable retirement, according to Gallup’s findings.
