401(k) savings rate at new record high but balances are down slightly

Markets swings have posed challenges for retirement savers in the first quarter, but they kept their nerve and boosted their savings.

A new report from Fidelity Investments show that average balances for accounts ended slightly lower in the quarter compared to the previous quarter. For 401(k) balances were down 4% to $121,983, for 403(b) balances were down 3% to $127,100, and for IRAs balances were down 2% to $115,424.

But both employee and employer savings rates remained strong – 11.8% for 403(b) and a record 14.3% for 401(k) made up of 9.5% for employees and 4.8% for employers.

IRA contributions increased 4.5% year-over-year to $3,231, with a notable 21% increase in contributions from Baby Boomers to an average $5,272.

Overall, the report reveals that more than 17% of savers increased their 401(k) contribution rate, 5% decreased it, and 6% changed their asset allocations. For 403(b) almost 15% increased their contribution rate, 3.5% decreased it, and 5% changed their asset allocations.

“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,” said Sharon Brovelli, president of Workplace Investing at Fidelity Investments. “This approach will help individuals weather any type of market turmoil and stay on track to reach their retirement goals.”

A recent report found that most Americans cannot answer the question “how long will my retirement savings last?” with 84% wishing they could better protect their retirement savings from inflation.