Americans Kept Saving For Retirement Even As Markets Got Rocky

The first quarter gave investors plenty of reasons to second-guess their retirement plans. Market volatility returned, headlines dominated the news cycle, and uncertainty remained high with the war in Iran. Yet Fidelity’s latest retirement analysis shows most retirement savers did exactly what advisors hope they would: they stayed the course.

That discipline showed up in several ways. Both 401(k) and 403(b) total savings rates reached new records with 14.4% for 401(k) savers, and 12% for 403(b) participants. While still behind Fidelity’s recommended 15% savings target, participants keep inching closer. IRA contributions also surged, climbing 29% from a year ago, while the number of account holders contributing to their IRAs increased 28%. Rather than pulling back during uncertain markets, many investors leaned in and continued prioritizing their long-term goals.

Perhaps even more telling was what investors didn’t do. Only 5% of retirement plan participants changed their asset allocation during the quarter, a slight decline from a year ago, suggesting most resisted the temptation to react to short-term market swings. When it comes to generations, Gen Z is also leading the way for IRA growth (65% year-over-year), followed by Millennials with a 31% increase.

While market volatility led to modest declines in account balances across the board from the previous quarter, the long-term picture remains encouraging. Average 401(k) balances were still up 11% from a year ago, while 403(b) balances rose 13% and IRA balances increased 7%. It’s a reminder that short-term fluctuations often look much smaller when viewed long-term.

Another trend continues to gain momentum: Roth adoption. Two-thirds of all IRA contributions went into Roth accounts during the quarter, while Roth conversion activity jumped 41% year over year. As tax planning becomes an increasingly important part of retirement advice, these conversations are likely to remain front and center for many clients.

For advisors, the message is both encouraging and instructive. Clients don’t need perfect markets to make meaningful progress toward retirement. They need consistent saving habits, thoughtful planning, and the confidence to stay invested when uncertainty inevitably returns. Markets will always test investor confidence, but advisors play a critical role in making sure short-term uncertainty doesn’t derail long-term progress.

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