Fidelity has reported that the number of 401(k) millionaires reached 512,000 in the first quarter of 2025, reflecting a decrease of 4.6% from 537,000 in the previous quarter. This decline coincides with ongoing volatility in the stock market, where contributors continued to invest in retirement accounts despite unwelcome market fluctuations.
The firm indicated that only 0.9% of 401(k) participants ceased their contributions entirely during this period, showcasing commitment among savers even in challenging economic circumstances. While average 401(k) balances saw a 3% drop to $127,100 from the end of last year, they remained 1% higher compared to the same quarter in the previous year.
Last year was notably better for retirement savers, who experienced an 11% increase in their average 401(k) balances. However, the sharp swings in the market in 2025 have posed challenges, with Fidelity reporting that average savings witnessed a rare 4% decline reminiscent of stock drops observed two years prior. Despite these challenges, many savers have refrained from panic selling, and stock indices have seen some recovery in recent months.
The overall savings rate for 401(k) plans rose to a record high of 14.3%, driven by a combination of employee contributions and employer matches, which have significantly aided retirement accumulation. According to Fidelity, many employers have also enhanced their 401(k) contributions due to profit-sharing arrangements.
The Secure 2.0 Act has contributed to changes in saving behavior by mandating automatic enrollments and gradual increases in contributions for new plans. This act is viewed as a potential boost for future retirement savings as it makes it easier for employees to participate and increase their savings over time.
Industry experts stress the importance of maintaining a long-term investment perspective, especially in light of fluctuating economic policies and market uncertainties. Many financial advisors encourage continued contributions to benefit from employer matches and to position savers favorably for market recoveries.
The resilience of investors amidst market volatility highlights a shift in attitudes towards retirement saving strategies; many have managed to stay focused on their long-term goals despite immediate market challenges. As we move through 2025, the volatility and economic shifts might pose hurdles, but they also underline the growing importance of strategic long-term planning in retirement savings.