Retirement accounts rebound to record highs after early-year slump. Here’s how to maximize your contributions

2025 didn’t start off so hot for investors, but fortunes have changed in a big way in Q3.

Data from Fidelity (1) revealed record highs across its 52 million retirement products, including 401(k)s and IRAs.

Currently, the average 401(k) balance is $144,400, while the average IRA balance is $137,902. For context, that’s respectively 20% higher and 17% higher since the third quarter of 2020.

The number of 401(k) and IRA millionaires also increased by 10% and 11.5% between Q2 and Q3, respectively. Fidelity reports that there are 654,000 401(k) investors and 559,181 IRA investors in this high-net-worth category.

Here’s what this surprising news says about the state of the economy, plus some tips on how to maximize your own contributions so you can also reach millionaire status.

Although the record highs in the U.S. stock market certainly impacted these numbers, Fidelity’s data suggests positive savings trends played a massive role.

In particular, 401(k)s give a peek into the current employer-employee relationship.

Fidelity found the contribution rate for 401(k)s stayed at 14.2% in Q3. That’s just shy of their ideal 15% range, and it suggests strong company support and investor resilience despite market volatility.

Another encouraging trend is the rise in Roth 401(k) contributions from younger generations. Roughly 20% of Gen Z and 19% of millennials now choose Roth 401(k)s.

Unlike traditional 401(k)s, Roth accounts don’t offer tax breaks for contributions, but they reward long-term holders with tax-free withdrawals. So, the increased interest in these accounts shows that younger generations are thinking long-term.

This trend towards Roth accounts also spilled over into IRAs, with 95% of Gen Zers investing in a Roth IRA.

While IRAs don’t offer as high contribution limits as 401(k)s, they give holders greater personalization over their investment decisions.

Plus, with adjustments in 2026, it’s going to get even easier for long-term investors to put their money to work in either account.

To adjust for inflation, the IRS announced upping contribution limits to $24,500 for 401(k)s (previously $23,500) and $7,500 for IRAs (previously $7,000). Catch-up contributions for IRAs for those over 50 also went up to $1,100 from $1,000 a year ago. (2)

These higher contribution rates make it possible for anyone with a 401(k) or IRA to grow their positions faster than before.

Read More: This is the quiet portfolio shift many wealthy investors are making in 2026. Should you consider it too?

If the growing number of 401(k) and IRA millionaires proves anything, it’s that wealth often comes from patience and consistency. Even in a choppy economy, there are smart and steady moves anyone can make to strengthen their retirement game.

For starters, if an employer offers a match, never leave that money on the table. Bumping up your contribution to hit that employer match can potentially add tens of thousands of dollars to your balance over time.

Automatic increases (aka auto-escalation) are another engine powering people to retirement millionaire status. Consider using this tool to automatically up contributions by 1% each year, ideally timed after annual raises so you barely notice the change.

It’s also worthwhile researching whether a Roth IRA could increase your total retirement net worth. The benefit of using a Roth IRA is that you get the taxes taken care of upfront.

However, that doesn’t necessarily mean skipping tax deductions always leads to more wealth. It all depends on your income tax bracket and how you think it will change in retirement.

The easiest way to calculate the benefits or drawbacks of using a Roth IRA is to use a free Roth IRA versus Traditional IRA calculator. With this tool, you can enter details like your age, contributions, and income to get a sense of how taxes affect savings in both scenarios.

And don’t feel too bad if you’re “late” to saving or paused earlier in life. Remember that the IRS lets you contribute catch-up contributions after 50 to accelerate your balance.

This extra money can go a long way toward keeping you on track to join the other retirement savings millionaires.

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Fidelity (1); IRS (2).

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.