Retirement account balances saw significant growth over the past year. Here’s what contributed to the change

Main Insights

• Fidelity's latest report shows that from the fourth quarter of 2024 to the fourth quarter of 2025, average 401(k) balances climbed by 11%, while IRA balances increased by 7%.

• Many financial professionals observe that individuals are more inclined to boost their retirement savings when the stock market is performing strongly.

Over the past year, those saving for retirement have seen notable growth in their account balances, fueled by a surging stock market and higher contribution rates. Increased contributions have played a key role in this upward trend.

Fidelity’s analysis, which reviewed millions of 401(k) and IRA accounts, revealed that the average 401(k) balance jumped more than 11% between Q4 2024 and Q4 2025, with IRA balances rising by 7% during the same period.

Stock Market Impact

In 2025, the S&P 500 surged by nearly 18%, driven largely by exceptional gains in AI-related companies such as NVIDIA (NVDA), Meta (META), and Alphabet (GOOGL).

According to some advisors, this robust market performance has encouraged more people to contribute to their retirement funds.

Zachary Bachner, a certified financial planner at Summit Financial Consulting, shared, “When clients witness the rewards of a rising market and the effects of compounding interest, they often become more enthusiastic about continuing their retirement contributions.”

What This Means for Savers

Building a secure retirement nest egg is all about consistency. Making regular contributions allows your savings to grow steadily over time, without the need to predict market movements.

In the last quarter of 2025, total IRA contributions were 23% higher than the previous year, and the number of people adding to their IRAs rose by 25%.

While record-breaking market highs can motivate increased contributions, Joon Um, CFP and owner of Secure Tax & Accounting, cautions against letting market performance alone dictate your investment decisions.

Um explains, “We remind clients not to chase market trends. The focus should be on developing a habit of consistent saving, regardless of how the market is performing.”

Instead, it’s important to take a comprehensive approach to retirement planning—estimate how much you’ll need in retirement and determine the contributions required to reach that target. A holistic retirement plan can help you stay on track.

Consider consulting a financial planner for personalized guidance, or use Fidelity’s general benchmarks to gauge your progress.

Fidelity suggests allocating 15% of your income—including any employer match—to your 401(k). To maintain your lifestyle in retirement, they recommend saving an amount equal to 10 times your pre-retirement income by age 67.

Fidelity’s Assumptions

These guidelines assume you’ll be eligible for Social Security, claim benefits at full retirement age (67 for those born in 1960 or later), do not have a pension, and keep at least half of your investments in stocks on average.

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