A few months of market swings have taken a toll on retirement savers.
The average 401(k) balance fell 3% in the first quarter of 2025 to $127,100, according to a new report by Fidelity Investments, the nation’s largest provider of 401(k) plans.
The average individual retirement account balance also sank 4% from the previous quarter to $121,983, the financial services firm found. Still, both 401(k) and IRA balances were up year over year.
The majority of retirement savers continue to contribute, Fidelity said. The average 401(k) contribution rate, including employer and employee contributions, increased to 14.3%, just shy of Fidelity’s suggested savings rate of 15%.
“Although the first quarter of 2025 posed challenges for retirement savers, it’s encouraging to see people take a continuous savings approach which focuses on their long-term retirement goals,” Sharon Brovelli, president of workplace investing at Fidelity Investments, said in a statement. “This approach will help individuals weather any type of market turmoil and stay on track.”
U.S. markets have been under pressure ever since the White House first announced country-specific tariffs on April 2.
Since then, ongoing trade tensions between the U.S. and European Union as well as China, largely due to President Donald Trump‘s on-again, off-again negotiations, caused some of the worst trading days for the S&P 500 since the early days of the Covid-19 pandemic.
However, more recently, markets largely rebounded from earlier losses. As of Wednesday morning, the Dow Jones Industrial Average was roughly flat year-to-date, while the Nasdaq Composite and S&P 500 were up around 1% in 2025.
‘Have a long-term strategy’
“It’s important to not get too unnerved by market swings,” said Mike Shamrell, Fidelity’s vice president of thought leadership.
Even for those nearing retirement age, those savings should have a time horizon of at least 10 to 20 years, he said, which means it’s better to “have a long-term strategy and not a short-term reaction.”
Intervening, or trying to time the market, is almost always a bad idea, said Gil Baumgarten, CEO and founder of Segment Wealth Management in Houston.
“People lose sight of the long-term benefits of investing in volatile assets, they stay focused on short-term market movements, and had they stayed put, the market would have corrected itself,” he said. “The math is so compelling to look past all that and let the stock market work itself out.”
For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published last year.
And, although stocks go up and down, the S&P 500 index has an average annualized return of more than 10% over the past few decades. In fact, since 1950, the S&P has delivered positive returns 77% of the time, according to CNBC’s analysis.
“Really, you should just be betting on equities rising over time,” Baumgarten said.
