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Fidelity: Average 401(k) Balance Hits a New High Again

Industry Trends and Research

Consistent savings among workers, combined with steady contributions from employers and positive stock market performance, helped boost the average balance of Fidelity’s 401(k) accounts to record levels for the second consecutive quarter.  

Fidelity Investments’ quarterly analysis of retirement account balances and savings behaviors shows that the average 401(k) balance increased to $123,900 in the first quarter of 2021—a 2% increase from the fourth quarter and a 36% increase from a year ago when the market dropped as a result of the pandemic. 

The firm’s average 403(b) account balance increased to a record $107,300—up 1% from the last quarter of 2020 and 42% higher than in the first quarter of 2020. The average IRA balance was $130,000, which was a 1% increase from Q4 2020 but a 31% increase from Q1 2020.

Highlights from Fidelity’s first quarter analysis include:

Average Retirement Account Balances


Q1 2021

Q4 2020

Q1 2020

Q1 2011
















Loans and Withdrawals Lower

Despite many U.S. workers still feeling the impact of the pandemic, loans and withdrawals from Fidelity retirement savings accounts were lower in the first quarter, the firm’s data shows. The percentage of workers with an outstanding 401(k) loan dropped to 17.5%, down from 19.7% in the first quarter of 2020. What’s more, only 1.6% of 401(k) savers initiated a new loan in the first quarter, which was flat from the fourth quarter of 2020 and down from 2.4% a year ago. 

Additionally, the percentage of workers who made a withdrawal from their 401(k)—including hardship withdrawals—dropped to 2.4% in the quarter, down from 6.1% in the fourth quarter and 3% a year ago.

Matching Contributions and Auto Enrollment

Additional findings show that employers are continuing to make matching contributions to 401(k) and 403(b) accounts. Fidelity notes that the average 401(k) employer contribution rate was 4.6%, while the average amount contributed to employees’ 401(k) was $1,720. Among 403(b) accounts, the average employer contribution was 4.1% and the average amount was $3,000. 

Companies made matching 401(k) contributions to 83% of employees in the quarter. The most popular 401(k) match formula in the first quarter—used by 41% of employers on the firm’s platform—continues to be a 100% matching contribution for the first 3% of an employee’s contribution and 50% match for the employee’s next 2%. 

In addition to matching contributions, employers are increasing their use of auto enrollment. More than a third (36.9%) of companies automatically enroll employees into their 401(k) plan. However, among large organizations with more than 50,000 employees, the percentage that automatically enroll employees jumps to 62%. Of the employees automatically enrolled in their 401(k) plan, more than 90% stay enrolled in their plan.

As for the difference between auto-enrolled versus non-auto-enrolled, Fidelity’s year-end 2020 data shows that the average participation rates for auto-enrolled plans is more than 87%, but only 52% for non-auto-enrolled plans. 

While the most common default savings rate for auto-enrolled employees is 3%, the firm notes that a growing number of companies are steadily increasing this rate. As of the first quarter, one in five employers (20%) auto enroll employees at a 6% savings rate.

Additional Trends

Fidelity also reports that in just the last five years, the percentage of plans offering Roth 401(k)s has increased by 32%. Millennials are the generation most likely to be contributing to a Roth, increasing from 10% to 16% in the last 10 years, which has also helped boost contributions. 

Overall, the percentage of plans offering a workplace managed account has continued to rise. According to Fidelity’s data, slightly more than 35% of plans offer workplace managed accounts as of the first quarter; this is up from 28.9% during the same period in 2019. Still, only 3.6% of participants have adopted workplace managed accounts—a level that has remained relatively consistent over the past three years. 

Regarding investment lineups, Fidelity’s largest corporate DC plan sponsors offered about 15 investment options in their lineups in the first quarter—down from 25 options from 10 years ago, according to the firm’s data. 

Fidelity’s analysis is based on 23,400 corporate DC plans with 19.6 million participants, 10,400 tax-exempt plans with 6.8 million participants, and 11.2 million personal investing IRA accounts, as of March 31, 2021.