Despite significant market volatility induced by tariff policies, 401(k) retirement accounts demonstrated strong performance in the first half of 2025, with average balances hitting record levels and savings rates remaining high. This resilience underscores the benefits of long-term investing strategies even amid economic uncertainty.
The first and second quarters of 2025 were particularly turbulent for investors, largely due to the Trump administration’s implementation of a complex tariffs regime that initially caused stock markets to plummet in April. However, markets eventually recovered, closing the second quarter at record highs, which positively impacted retirement savings across the board. This recovery was driven by renewed investor confidence and adaptive economic policies that helped stabilize conditions after the initial shock.
According to data from Fidelity Investments, which oversees approximately 25 million workplace retirement accounts, the average 401(k) balance reached $137,800 by June 30, marking an 8.4% increase from the $127,100 recorded at the end of the first quarter. This also represents a 4.6% growth from the $131,700 average at the close of 2024, indicating steady improvement despite the economic headwinds posed by tariffs and market fluctuations. These figures highlight the overall health of retirement savings amid challenging conditions.
Savings behavior among participants was robust, with individuals contributing an average of 14% of their salaries to their 401(k) plans. Employee contributions accounted for 9.5%, while employer matches made up the remaining 4.8%, demonstrating continued commitment to retirement planning even during uncertain times. Interestingly, only about 5.5% of participants altered their asset allocations during the quarter, a rate consistent with historical norms and lower than the spike seen during the early pandemic, suggesting that most investors maintained a steady course.
The number of 401(k) accounts with balances exceeding $1 million surged to an all-time high of 595,000 by the end of the second quarter, up from 512,000 in the first quarter and 497,000 a year earlier, as also noted in reports from Morningstar. The median balance within this elite group stood at $1.4 million, with half holding more than that amount. Despite this growth, million-dollar accounts constitute only 2.4% of all 401(k)s in Fidelity’s database, pointing to significant wealth disparities among savers.
Generational analysis reveals that Gen Xers, who are approaching retirement age, hold the majority of these high-balance accounts, with 346,000 million-dollar accounts belonging to this cohort. Another 628,000 Gen X accounts have balances between $500,000 and $999,999. However, these figures represent a small fraction of the approximately 65 million Gen Xers in the U.S., underscoring broader retirement savings challenges and the need for increased financial literacy and planning among this demographic.
The median 401(k) balance across all participants was just $32,300 at the end of June, though this was an increase from $29,800 in the previous quarter. This low median is partly attributable to younger workers like Gen Z who have only recently started saving, as well as to varying income levels and savings habits. For Gen Xers specifically, the median balance is higher at $62,400, but still means half have less than that amount saved, highlighting the urgency for many to boost their retirement preparations.
While comparing one’s savings to these averages can be insightful, financial experts emphasize the importance of personalized retirement planning based on individual needs, health, and anticipated lifestyle. The resilience of 401(k) performance amid tariff-induced market volatility offers a positive outlook, but ongoing economic uncertainties, including potential future tariff impacts, necessitate careful monitoring and potential adjustments to savings strategies to ensure long-term financial security.