Saving consistently in a 401(k) is one of the best things you can do for your retirement. Social Security probably won't pay you enough money to cover your living costs in full. So you'll need some income to supplement those monthly benefits. And a 401(k) is a great place to find it.
Not only are 401(k)s convenient, since they're funded right out of payroll deductions, but many companies offer workers a 401(k) match. That's effectively free money for your retirement provided you contribute some money yourself.
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You may be curious to know how your 401(k) plan balance compares to the average saver's. To that end, Fidelity has some new data. And it may surprise you.
Balances are down, but that's no reason to panic
Fidelity reports that as of the end of the first quarter of 2025, the average 401(k) balance was $127,100. That marks a 3% decline from the previous quarter.
The reason the average 401(k) balance dropped likely stems from market volatility, which actually continued well past the first quarter of the year. It's also worth noting that some people's balances may have recovered from that volatility already. Because Fidelity reports 401(k) data on a quarterly basis, recent updates aren't reflected in the numbers it just put out.
Don't stress about near-term changes
If your 401(k) plan lost value between the start of the year and the end of the first quarter, or between the start of the year and the present, don't panic. Fluctuations in your balance are normal and can occur for a number of reasons.
The key is to fund your 401(k) on a regular basis, all the while making sure you're at least bringing home your full employer match. Also make certain you're investing your 401(k) wisely, and that you aren't losing too much money to fees.
You may want to favor passively managed index funds in your 401(k) to minimize your investment costs. And be careful with target date funds. They might seem like an easy investment. But "easy" doesn't always mean you're getting the returns you want out of your retirement savings.
What if your 401(k) balance is much lower?
Your 401(k) balance may be nowhere close to $127,100. But that, too, is nothing to panic over.
That $127,100 balance represents the average for savers across all ages. If you're 34 years old, it stands to reason that you may not have as much money in your 401(k) as someone who's 54 and has been working 20 years longer than you have. Not only have older workers had more time to contribute to their savings, but they've also had more years of compounded returns.
But if you're not happy with the progress you've been making in your 401(k), assess your spending. Can you cut back in some areas to free up more money for savings? And if not, can you pick up a side hustle to get that 401(k) funded at a faster pace?
It may also be that your 401(k) balance is lower than you'd like it to be because you have your money invested too conservatively. Take a look at the big picture before getting worked up. And if need be, sit down with a financial advisor who can offer guidance on investing your 401(k) and finding the room in your budget for ongoing contributions.
