401(k), 403(b) Saving Rates Hit Record Levels in Q1 Despite Market Volatility

Despite market volatility in the first quarter of the year, both 401(k) and 403(b) saving rates for plans recordkept by Fidelity reached record levels in the period, according to Fidelity’s “Q1 2026 Retirement Analysis” report, released Thursday.

The average total 401(k) saving rate increased to 14.4% in Q1, up 0.2 percentage points from a steady 14.2% in the previous three quarters, Fidelity reported. The average employee contribution rate reached a record high of 9.6%, and the average employer contribution rate was 4.8%. For 403(b) plans, the average total saving rate increased to 12% over the quarter, up from 11.7% in Q4 2025.

Meanwhile, 18% of 401(k) participants increased their saving rate over the quarter—largely due to automatic increases—while 5.7% made a change to their asset allocation, down slightly from 6% one year earlier. The youngest cohorts of participants largely stayed the course: 3.8% of Generation Z and 5.1% of Millennials adjusted their 401(k) asset allocations in Q1, compared with 6.9% of Generation X and 6.9% of Baby Boomers who did so.

“Retirement savers started the year strong with record-high saving rates and contributions, reflecting the long-term approach they’re taking with retirement preparedness,” said Sharon Brovelli, Fidelity’s president of workplace investing, in a statement. “While it can be tempting to make changes to retirement savings during market volatility, it is positive to see participants stay the course with their contributions—an approach that will strengthen their outcomes as retirement nears.”

Average account balances for 401(k)s and 403(b)s dipped slightly over the quarter, however. The average 401(k) balance went down 3.7% from Q4 2025, to $141,000 from $146,400, while the average 403(b) balance fell 2.6% over the quarter, to $130,000 from $133,500.

The onset of war between the U.S. and Iran on February 28 rocked equity markets in March, but they picked back up in April.

Contributions to individual retirement accounts recordkept by Fidelity also hit record highs in the quarter despite IRA balances dropping. IRA contribution amounts grew 29% from Q1 2025, and the number of accounts receiving contributions grew 28% over the same period. While the average IRA balance was down about 4% from Q4 2025, it was up approximately 8% from Q1 2025.

The IRA contribution levels were driven by strong demand for Roth accounts, with 67% of contributions going to Roth IRAs and with Roth conversion transactions increasing by 41% year over year, according to the report.

Gen Z made the largest increase in IRA contributions year over year, at 65%, followed by Millennials, who increased their contributions by 31%. Gen Z was also the most likely cohort to contribute to a Roth 401(k), with 21.4% of participants contributing, compared with 18.8% of participants overall.

Fidelity’s analysis was based on 19.6 million IRA accounts; 26,800 401(k) plans with 25.6 million participants; and 10,660 403(b) plans with 9.45 million participants, as of March 31.