After a downturn in early 2025 due to market swings, retirement account balances hit new heights in the third quarter, as reported by Fidelity Investments, the leading provider of 401(k) plans.

The average 401(k) balance rose by 9% year-over-year, reaching an impressive record of $144,400. Additionally, individual retirement accounts (IRAs) saw their average balance climb by 7%, landing at $137,902.

Interestingly, there’s been a noticeable rise in interest surrounding Roth 401(k)s and IRAs, particularly among younger savers. For 2026, individuals can now contribute up to $24,500 to Roth 401(k)s, but with the twist that contributions are taxed upfront, making withdrawals tax-free in retirement. This structure is somewhat similar to Roth IRAs, though the contribution limits differ. For Roth IRAs, those under 50 can contribute up to $7,500 annually post-tax and take it out tax-free later on.

Robert Masciarino, president of wealth at Fidelity, emphasized that viewing retirement as a long-term endeavor is crucial. The surge in interest for Roth options indicates that investors are starting to appreciate the associated tax benefits and growth possibilities.

Mike Shamrell, vice president of thought leadership at Fidelity, noted that while some research highlights retirement savings gaps across generations, Fidelity’s data paints a more optimistic picture, especially among young workers, including Gen Z. “We’re witnessing commendable savings behavior among them,” he mentioned.

Alongside growing account balances, the number of individuals with substantial savings is also on the rise. As of September 30, the count of 401(k) accounts boasting at least $1 million grew to 654,000—an increase of 10% from the previous quarter. Additionally, those with million-dollar IRAs saw a substantial 11.5% rise, putting the total at an all-time high of 559,181.

Shamrell pointed out that proactive saving habits played a significant role in achieving these positive results. Remarkably, most retirement savers kept contributing even during market fluctuations. “Despite the economic worries, it’s reassuring that we haven’t faced setbacks in our retirement savings efforts,” he remarked.

Fidelity’s research also found that the average combined contribution rate for 401(k)s, including both employer and employee contributions, remained consistent at 14.2%, just shy of the suggested rate of 15%.

The favorable performance of major market indexes further bolstered these gains. For instance, U.S. markets experienced challenges following the announcement of targeted tariffs in April, leading to significant drops, especially for the S&P 500. Nevertheless, the markets rebounded strongly in the subsequent quarters. By September 30, the Dow Jones Industrial Average had risen by 9%, the S&P 500 was up 14%, and the Nasdaq Composite climbed 17%.