Are Americans with 401(k) accounts saving enough for retirement? Fidelity's latest report has this to say

After years of slow progress, Americans may finally be getting close to saving enough for retirement, or at least those with access to a 401(k) plan are, as per a report.

Americans are getting closer to retirement readiness

Fidelity Investment’s latest retirement savings report revealed that in the first quarter of 2025, the average total 401(k) savings rate on its plans reached 14.3%, reported USA Today. That’s an all-time high and just a step away from the long-recommended 15% benchmark many financial advisers suggest for a secure retirement, as per the report.

A decade of progress

Ten years ago, the picture looked different, as in early 2015, employees were saving just 8.1% of their pre-tax income, while employers added 4.4%, for a total savings rate of 12.5%, according to USA Today. By comparison, today’s employees are contributing 9.5%, with employers pitching in 4.8%, as per the report.


Vice President of Thought Leadership at Fidelity, Mike Shamrell said, “It’s basically the rate that we recommend that will allow you to live the same lifestyle in retirement that you did before you retired,” quoted USA Today.

Better employer matches help

One reason for the increase is that employers are more generous with their matching contributions. As competition for talent grows, many companies now offer to match up to 5% of employee salaries, as per USA Today.

A senior director of investing at Betterment, Mindy Yu said, “That’s basically free money for saving for retirement, and that is something that employees value,” as quoted in the report.

Auto-enrollment is making a difference

Auto-enrollment policies are also having an impact as since the beginning of 2025, most new 401(k) plans are required to automatically enroll workers unless they opt out, as per USA Today. This simple change has encouraged more participation and is steadily improving savings habits, according to the report.

More than one-third of Fidelity’s plans now auto-enroll workers at contribution rates of 5% or more, reported USA Today. Many plans also include auto-escalation features, which increase contributions gradually every year, and nearly three-quarters of Fidelity’s plans now include this feature, reported USA Today.

A head of thought leadership at Alight Solutions, Rob Austin said, “Unless a new hire takes action, they’re going to be saving for the plan,” adding, “That’s much different than how 401(k)s first started, and you had to enroll on your own,” as quoted in the report.

Gen Z steps up

Fidelity’s data shows that Gen Z workers, though they are in the early phase of their careers, are saving at a promising rate of 11.2%, as per USA Today. That’s close behind Millennials at 13.5% and Generation X at 15.4%, according to the report.

Austin said, “I think most of the newer, younger cohorts are in this environment where they learn that they need to be saving a lot,” quoted USA Today.

FAQs

What’s a good savings rate for my 401(k)?
Financial advisers typically recommend saving at least 15% of your salary, including employer match for a secure retirement.

What’s auto-enrollment and why does it matter?
Auto-enrollment automatically signs you up for a 401(k) when you start a job. It’s helped more people start saving without needing to opt in.