Average 401(k) Balances Surge as Workers Max Out Contributions

Average 401(k) balances have jumped significantly thanks to a resilient stock market, according to new data released Wednesday by Fidelity. The brokerage reported a 10.5% increase in account balances between March and June, marking the largest quarterly gain since 2020.

For Fidelity participants in their 30s, the average balance reached $75,200. Among those in their 40s, the average accumulated to $156,800.

Beyond account growth, contribution behaviors are also showing strength. Workers are directing a historically high percentage of their paychecks toward retirement accounts. Including employer matches, 401(k) holders are contributing an average of 14.4% of their pay, narrowly missing Fidelity’s recommended threshold of 15%.

Additionally, more than 80% of participants are contributing enough to secure their full employer match—a benefit where the employer contributes funds up to a specified limit based on the employee’s own contributions.

“A 401(k) is a fantastic retirement savings tool for a lot of reasons,” said Kevan Melchiorre, co-founder of Tenet Wealth Partners and a certified financial planner. “I’d generally rank it as one of the more high-priority retirement savings options out there, especially when a match is provided.”

Fidelity’s general guidelines suggest that individuals should have one times their annual income saved by age 30 and three times their income by age 40. However, experts note that these benchmarks include all retirement savings vehicles, not just 401(k)s. The ultimate goal is to accumulate ten times one’s income by age 67, which the brokerage estimates is necessary to maintain a comfortable standard of living during retirement.

While current balances indicate positive trends, financial advisors emphasize that a healthy account size alone does not guarantee retirement readiness. Investors are encouraged to review their total savings landscape to determine if they are on track or need to adjust their strategies.