Retirement investors navigated the market swings of 2025 — and a significant number reached millionaire status

Retirement Accounts Rebound Amid Market Fluctuations

Throughout the past year, retirement portfolios faced significant ups and downs as market volatility persisted. Despite these challenges, many savers remained resilient—and a notable number reached millionaire status.

According to a recent Fidelity Investments report, the average 401(k) balance climbed 11% to $146,100 by the end of the year. The count of retirement savers with at least $1 million in their accounts also reached a record high.

Michael Shamrell, vice president of workplace thought leadership at Fidelity, emphasized to Yahoo Finance that “a successful retirement plan relies on a long-term perspective, rather than reacting to short-term market events.”

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Shamrell added, “Even with the economic uncertainty and market swings in 2025, both employees and employers continued to make steady contributions to retirement accounts, which helped push overall savings to new heights.”

For the third consecutive year, average balances in both 401(k) and 403(b) plans saw double-digit growth, while the typical IRA balance rose by 7% year-over-year.

Fidelity’s data comes from thousands of workplace retirement plans and nonprofits across the country, representing over 40 million participants, as well as nearly 19 million IRA accounts.

The robust gains mirror the strong performance of the US stock market in 2025: the S&P 500 advanced 16.9%, the Nasdaq Composite surged over 20%, and the Russell 2000 increased by roughly 13%.

Further reading: How much can you contribute to your 401(k) in 2026?

Staying Focused on Long-Term Goals

For those who have consistently participated in their employer’s 401(k) plan for at least five years, average balances increased by 16% compared to the previous year.

This growth is largely due to disciplined saving habits. On average, these savers contributed 14.2% of their income, including a 9.5% employee contribution and a 4.7% employer match—similar to the previous year’s rates.

Nearly 40% of workers increased their 401(k) contributions at some point in 2025, while only about 11% reduced them.

IRA contributions also saw a significant boost, rising 25% from the prior year. Total IRA contributions reached a record high between September and December, according to Fidelity’s data.

Further reading: Find the 10 best high-yield savings accounts

Gen X Leads the Charge

Gen Xers, with the oldest turning 61 this year, stood out by increasing their retirement contributions by 25% year-over-year.

Millennials and Gen Z are increasingly choosing Roth 401(k)s, and Gen Z continues to favor target date funds, according to the report.

In addition, more than 13% of Gen Z participants in their 20s raised their contribution rates between September and December, underscoring the benefits of starting early.

Record Number of 401(k) Millionaires

The number of 401(k) millionaires soared to 665,000 by the end of December, up from 512,000 at the start of the year.

Gen X represents the majority of these millionaires at 60.3%, followed by boomers at 34.6% (many of whom are now withdrawing funds), and millennials at 4.1%.

“Historically, 401(k) millionaires have been Gen X and boomers,” Shamrell explained. “But as millennials advance in their careers, we’re seeing more of them reach the million-dollar mark—a notable shift.”

Strategies for Steady Growth

By making automatic contributions to your workplace retirement plan or IRA, you invest consistently—regardless of whether the market is rising or falling. Over time, this approach helps smooth out returns.

Target date funds are another tool that helps investors stay on track during market turbulence. About 63% of Fidelity’s 401(k) participants have their entire balance in a target date fund.

These funds automatically adjust the mix of stocks and bonds, both domestic and international, to become more conservative as you approach retirement.

Fixed-income investments also play a crucial role. Less than 7% of Fidelity’s 401(k) savers have all their assets in stocks, highlighting the importance of diversification.

While equities can drive growth during strong markets, bonds provide stability and peace of mind when economic uncertainty arises.

Kerry Hannon is a Senior Columnist at Yahoo Finance, specializing in careers and retirement. She is the author of 14 books, including Retirement Bites: A Gen X Guide to Securing Your Financial Future, In Control at 50+: How to Succeed in the New World of Work, and Never Too Old to Get Rich.

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