Fidelity Sees Record High 401(k) Contribution Rates in Q1

Workers put away a record share of their income for retirement in the year’s first quarter, according to Fidelity Investments’ Q1 2025 retirement analysis. 

The average contribution rate to 401(k) plans hit 14.3% in Q1, the closest yet to Fidelity’s suggested saving rate of 15%, according to a Fidelity analysis of the millions of accounts it recordkeeps.

The record high was driven by a 9.5% employee contribution rate and an employer contribution rate of 4.8%. The total 403(b) contribution rate held steady at 11.8%.

In Q1, 17.4% of 401(k) participants at Fidelity increased their saving rate, while 4.9% decreased. For 403(b) plans, 14.6% of participants increased their contribution rate, while 3.5% decreased their contribution.

Despite the increase to contributions, according to Fidelity, market volatility brought the average balance of 401(k), 403(b) and individual retirement accounts down in Q1 from Q4 2024.

The average 401(k) balance in Q1 was $127,100, according to Fidelity, down 3% from Q4 2024, but up 1% from Q1 2024. Meanwhile, the average 403(b) balance was $115,424 in Q1, down 2% from the previous quarter but up 2% from the same time last year. Average IRA balances shrunk the most in Q1, averaging $121,983, down 4% from Q4 2024 and down 1% year over year.

The declines come as public equities suffered in Q1, partly because of President Donald Trump’s trade wars, which caused large swings in financial markets toward the end of the quarter. For example, the S&P 500 stumbled in Q1, falling 4.6%, but the index is up more than 5% since May 2.

“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, Fidelity Investments’ president of workplace investing, in a statement. “This approach will help individuals weather any type of market turmoil and stay on track to reach their retirement goals.”