Retirement account balances declined in the first quarter due to stock market turbulence, but savers continued to contribute to their accounts. A recent analysis by Fidelity Investments found that the average balances of 401(k), IRA, and 403(b) accounts dropped slightly during the first three months of 2025.
The 401(k) account balance decreased by 3% to $127,100, while IRA accounts had an average balance of $121,983, and 403(b) accounts had $115,424. Fidelity attributes these declines to market swings, including uncertainty surrounding tariffs and policy issues affecting popular index funds.
Despite the market volatility, retirement savings rates remained high. For 401(k) accounts, employee contribution rates reached 9.5% and employer contribution rates came in at 4.8%, totaling a combined rate of 14.3%. This is near Fidelity’s suggested target of 15%.
Notably, contributions from holders of 403(b) accounts increased by 11.8%. Meanwhile, only a small percentage of users altered their asset allocation during the first quarter, with 6% of 401(k) users and 4.7% of 403(b) users making changes.
Fidelity’s president of workplace investing, Sharon Brovelli, stated that it’s encouraging to see people taking a continuous savings approach focused on long-term retirement goals. She added that this approach will help individuals weather market turmoil and stay on track to reach their retirement objectives.
Source: https://www.foxbusiness.com/personal-finance/retirement-account-balances-dip-first-quarter-savers-keep-contributing