Average 401(K) Savings Rate Hits Record High of 14.3%, Fidelity Reports

The average 401(k) savings rate in the U.S. has reached a historic high, climbing to 14.3% of income when accounting for both employee and employer contributions, according to a new report from Fidelity Investments.

Fidelity’s quarterly analysis, covering 25,300 corporate plans and 24.4 million participants, found that as of March 31, 2025, the savings rate is now closer than ever to the company’s recommended 15% target. The benchmark includes contributions from both employees and employers and is aimed at sustaining a comparable lifestyle in retirement.

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“We definitely saw a lot of positive behaviors continue into Q1,” said Mike Shamrell, vice president of thought leadership for Fidelity’s Workplace Investing.

Employees contributed an average of 9.5% during the first quarter, while companies added an average of 4.8%, bringing the total to 14.3%. Notably, two-thirds of the employee contribution increases were driven by auto-escalation features that raise savings rates over time, typically linked to salary increases.

While 15% is the general savings guideline for retirement readiness, Fidelity notes that the ideal rate may vary depending on factors such as a person’s existing savings, retirement age, and access to pensions.

“There’s no magic rate of savings,” said certified financial planner Larry Luxenberg, founder of Lexington Avenue Capital Management. “Everyone spends and saves differently.”

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For individuals not yet hitting the 15% mark, Shamrell emphasized the importance of at least contributing enough to qualify for an employer match — often considered one of the best available financial benefits.

Fidelity reported that the most common 401(k) match formula is 100% of the first 3% contributed by the employee, and 50% of the next 2%.