Americans Had Record-High Retirement Balances Last Quarter, Even With Economic Turmoil

Retirement account balances reached a record high in the second quarter, even as Americans endured market volatility, tariff uncertainty, and ongoing inflation.

The average 401(k) balance increased by 8% from Q2 of 2024, according to Fidelity’s second quarter analysis. It was the highest increase since the last quarter of 2023. The average balance of a 403(b), which is a retirement plan offered by public schools and nonprofits, climbed 9%, while average IRA balances rose by 5%.

Stocks Posted Strong Gains

Even with shaky market performance at the start of the quarter and considerable concerns over tariffs throughout, the S&P 500 Index rose by nearly 11% in Q2, and the Nasdaq Composite Index surged by almost 18%. Those gains, coupled with consistent savings, helped investors see positive results for their retirement balances from April 1 to June 30.

“Despite market turbulence in the beginning of April [when tariffs first rolled out], we found that retirement savers were able to benefit from the positive stock market performance that came in May and June by continuing to save and not make changes to their asset allocation,” said Michael Shamrell, vice president of workplace thought leadership at Fidelity Investments.

“We have seen throughout history that when markets rebound, they often do so quickly, so it is important to remain invested to be able to benefit from the upward market swing that will ultimately come,” he said.

Based on Fidelity data, the average 401(k) balance is $137,800, the average IRA balance is $131,366, and the average 403(b) balance is $125,400. These balances blow the Q2 average balances from a decade ago out of the water.

Still, it’s important to note that these amounts alone aren’t nearly enough to cover what the average retiree needs to live off in retirement. Fidelity recommends that by age 67, people should have at least ten times their annual earnings saved.

Consistency Is Key

Fidelity said these record-breaking numbers are the result of an employee contribution rate of 9.5% and an employer contribution rate of 4.8%. The combined total of 14.2% is close to the financial institution’s suggested savings rate of 15%. 

“This diligence and focus on long-term retirement goals contributed to this quarter’s retirement balance rebound, demonstrating the importance of staying calm and not overreacting to market changes,” said Sharon Brovelli, president of Workplace Investing at Fidelity Investments, in a press release.

Savers can weather market turmoil as long as they don’t react too quickly to short-term market changes, Shamrell said.