Workers continued to boost retirement savings in the first quarter of 2026 despite equity market turbulence, according to Fidelity Investments' latest retirement analysis covering more than 54 million IRA, 401(k), and 403(b) accounts. The total savings rate for 401(k) participants reached 14.4%, combining employee and employer contributions, inching toward Fidelity's recommended 15% target. For 403(b) participants, the rate hit 12%.
The average employee contribution rate climbed to 9.6%, a record in Fidelity's tracking, while the average employer contribution rate held at 4.8%. Employer contributions also set a record: the average quarterly amount reached $2,080, surpassing the prior peak of $2,020 from Q1 2025. Nearly one in five participants (18%) raised their savings rate during the quarter, largely through automatic escalation features. Only 5.7% altered their asset allocation, down from 6% a year earlier.
Average account balances dipped slightly due to market conditions. The average 401(k) balance stood at $141,000 as of March 31, down 4% from the prior quarter but up 11% year-over-year. The average 403(b) balance was $130,000, off 3% from Q4 2025 but up 13% from Q1 2025. Fidelity counted 645,000 401(k) millionaires at quarter-end, down from 665,000 at year-end 2025, reflecting the market pullback.
IRA activity was a standout. The number of IRA account holders making contributions rose 28% year-over-year, and total IRA contributions jumped 29% from Q1 2025. The average IRA balance was $131,380, down 4% from the fourth quarter but up 7% year-over-year. Roth accounts drove much of the growth: Roth IRAs accounted for 67% of IRA contributions, and Roth conversion transactions increased 41% year-over-year.
Gen Z led IRA growth with total contributions up 65% year-over-year, followed by Millennials at 31%. Rita Assaf, vice president of Retirement Offerings at Fidelity, attributed the surge to greater platform accessibility and heightened financial awareness from social media, finfluencers, and workplace wellness programs. "Gen Z is more financially aware than other generations because they are seeing some of the struggles their parents went through and they are taking more action," Assaf said.
Fidelity's separate 2026 Stock Plan Participant Research, surveying over 25,000 employees globally, found that 43% of participants became first-time investors through their company's stock plan. Of those, 34% later invested beyond the plan. The research also showed 73% plan to use stock plan proceeds for long-term financial strategy, and 61% expect equity assets to fund retirement. Additionally, 56% said equity compensation makes them more likely to stay with their employer, and 65% consider it important when evaluating a job offer.
For advisors, these findings underscore the role of equity compensation as a gateway to broader investing. The data also align with trends seen in Vanguard's 2025 data, which highlighted record auto-enrollment and savings rates. Meanwhile, the rise in Roth conversions and Gen Z engagement suggests a shift toward tax-efficient strategies, a theme echoed in Corebridge's survey on retiree fears of outliving savings.
