### Resilient 401(k) Contributions Amid Market Dips

Despite a challenging year for 401(k) balances, recent data from Fidelity reveals that investors are maintaining their contributions. According to the investment firm's latest report, the average 401(k) balance fell by 3% in the first quarter of 2025, settling at $127,100. This decline aligns with the broader market trend, as the S&P 500 experienced a 4.3% drop in the same period due to economic concerns and tariff issues.

However, confidence among savers remains robust. Fidelity reports that the average contribution rate, which includes employer contributions, reached a record high of 14.3%. This figure is just shy of Fidelity's recommended rate of 15%. Nearly 20% of savers have actually increased their contribution rates, indicating that many people continue to believe in the long-term benefits of their 401(k) plans.

Although the number of 401(k) millionaires—accounts with balances over $1 million—decreased by 4.6% to approximately 512,000, this is a small drop from a high of 544,000 in the third quarter of the previous year. Fidelity emphasizes that those who have remained committed to their 401(k) plans for five years or more are still seeing substantial growth in their investments.