Average 401(k) Savings Rate Reaches Record High of 14.3% in Q1 2025

The average 401(k) savings rate, including both employee and employer contributions, reached a record high of 14.3% in the first quarter of 2025, according to Fidelity Investments' quarterly analysis of 25,300 corporate plans with 24.4 million participants. This marks the closest the rate has come to Fidelity's recommended 15% savings target. Employees deferred a milestone 9.5% into their 401(k) plans during Q1, while employers contributed 4.8%. Two-thirds of the increase in employee deferrals came from auto-escalations, which automatically raise savings rates over time, often in line with salary increases. Mike Shamrell, vice president of thought leadership for Fidelity's Workplace Investing, noted that despite economic uncertainty, positive savings behaviors continued into Q1. However, experts emphasize that the ideal savings rate varies by individual, depending on factors like existing nest eggs, planned retirement dates, and pensions. Larry Luxenberg, a certified financial planner and founder of Lexington Avenue Capital Management, highlighted that there is no universal magic rate, as spending and saving habits differ. Fidelity advises aiming for at least 15% of pre-tax income annually, including employer contributions, to maintain one's lifestyle in retirement, assuming continuous savings from ages 25 to 67.