Fidelity's record retirement balances make the case for contributions

Fidelity's average 401(k) balance reached $155,000 in the second quarter, up 10.5% from the prior three months and the strongest quarterly gain since late 2020, according to Fidelity data reported by InvestmentNews. The average 403(b) balance set a record at $145,000, up 11.5% from the first quarter. The gains reverse a softer start in which average 401(k) and IRA balances slipped from their Q4 2025 peaks even as contribution rates hit records.

The rebound arrives just as advisors field client questions about whether steady contributions still make sense, and Fidelity's workplace-investing president, Sharon Brovelli, attributes it to participant behavior rather than markets alone. IRA contributions rose 36% from a year earlier, 81.2% of 401(k) participants saved enough to capture their full employer match, and employer-match participation set a record, which she reads as workers continuing to prioritize their financial future over short-term noise.

Those questions keep coming because the same Fidelity polling finds 55% of savers concerned about the economy, 46% stressed about inflation and the cost of living, and 42% unsettled by geopolitics, even as 36% described their financial health as good or excellent. A strong balance and a pessimistic news feed can evidently coexist.

Women with at least five years of continuous 401(k) participation crossed an average balance of $250,000 for the first time, and female IRA investors reached an average above $130,000, up 12% year over year. Small-business retirement accounts, including self-employed 401(k)s, SEP IRAs and SIMPLE IRAs, grew 178% since 2021, with contributions up 46% over that stretch and accounting for 28% of all retail retirement contributions in the second quarter. Nearly half the U.S. workforce is employed by small businesses, which makes that growth path more than a footnote.

Advisors should press the figure that remains under target, because savings rates stand at 14.4% for 401(k) participants and 12% for 403(b) participants, both below the 15% Fidelity recommends. Record balances were built while contributing under that benchmark, which suggests the next leg of growth will be funded more from the contribution line than from market returns; a record balance reflects past contributions and past returns, but only the contribution side is still in the client's control. A client weighing a pause is deciding, in effect, whether 14.4% is enough.