Retirement Account Trends Amid Market Fluctuations

Recently, Jack Otter and the panelists on Baron’s Round Table discussed effective retirement preparation strategies in today’s turbulent market. This discussion comes at a time when retirement account balances have been affected by unstable stock market conditions.

New data from Fidelity Investments reveals that, despite these challenges, individuals are still withdrawing funds from their retirement accounts. The company examined over 50 million retirement accounts and concluded that, in the first quarter of 2025, average balances for 401(k), IRA, and 403(b) accounts experienced slight declines.

Fidelity’s findings indicate that the average balance for 401(k) accounts dropped by 3% to $127,100. Similarly, IRA accounts averaged $121,983, while 403(b) accounts were at $115,424, reflecting 4% and 2% decreases, respectively, from the previous quarter.

The declines in account balances were largely due to “market fluctuations.” The first quarter brought significant uncertainty surrounding tariffs and other policy matters that impacted popular index funds.

Interestingly, Fidelity noted that retirement savings rates have remained “consistently high.” In fact, the contribution rate for 401(k) accounts reached 9.5% during the quarter, while employers contributed 4.8%. Overall, the savings rate for these accounts reached a notable 14.3%, described as “record” and close to the 15% target.

On the other hand, 403(b) account holders exhibited an average contribution rate of 11.8%. Sharon Brobery from Fidelity remarked that while the first quarter posed challenges for savers, the ongoing commitment to long-term retirement goals is indeed encouraging. Many individuals are adapting their strategies to navigate various market disruptions.

During this volatile period, 17.4% of 401(k) participants even increased their contributions, although there was a 4.9% drop overall. In contrast, 403(b) holders saw their contributions rise to 14.6% in the same timeframe.

Those invested in these retirement plans did make adjustments to their asset allocations; however, only 6% of 401(k) users and 4.7% of 403(b) participants changed their investments during the quarter.

Additionally, Fidelity shared that individuals with IRAs increased their contributions by 4.5% compared to the first quarter of 2024. A survey from Gallup indicated that 59% of U.S. adults contribute to retirement savings accounts. Yet, among those still working, half expressed their concerns about whether their savings would be adequate for a comfortable retirement.