The stock market's volatility this week might make investors feel uneasy, but a recent study by Fidelity Investments reveals a positive trend in 401(k) balances. Despite the market's unpredictable nature, the average 401(k) balance grew by 11% in 2025, reaching $146,100. This growth is attributed to both market performance and consistent savings habits among participants.
The S&P 500 and Nasdaq saw impressive gains last year, with the S&P 500 ending up 16.39% and the Nasdaq rising over 20%. However, the average savings rate of 14.2% remained steady, including employee contributions of 9.5% and employer matches of 4.7%.
Interestingly, the median balance of $34,400 is significantly lower than the average, indicating a wide range of retirement savings. Accounts with participants saving for at least 15 years show a median balance of $377,700, highlighting the benefits of long-term savings.
Fidelity's data also reveals a notable increase in million-dollar accounts, with 665,000 accounts reaching this milestone. Gen Xers, born between 1965 and 1980, make up the majority of these high-balance accounts, despite their median balance being just $67,100. This discrepancy suggests that catch-up contributions may be necessary for many Gen Xers, as they entered the workforce during a shift from company pensions to self-directed 401(k)s.
In celebration of Women's History Month, Fidelity's analysis of women's 401(k) participation revealed an average balance of $119,500, a 22% increase over five years. However, their median balance of $29,400 indicates a need for further savings, with nearly 40% of women increasing their savings rate last year.
