Retirement Anxiety Is Real, But Confidence Is Growing

Keep calm and carry on.

Americans aren’t pulling back on retirement savings, despite market volatility fueled by the war in Iran, tariff uncertainty, rising oil prices and a host of other economic concerns. They’re actually leaning in. Fidelity reported IRA contributions surged 29% year over year in the first quarter, a record increase. Total savings rates for both 401(k) and 403(b) accounts also reached all-time highs.

Inflation pressures are still hitting consumers at the gas pump, the grocery store, the doctor’s office and, well, pretty much everywhere. But Americans appear increasingly confident in their ability to prepare for retirement. “While it can be tempting to make changes to retirement savings during market volatility, it is positive to see participants stay the course,” Sharon Brovelli, president of workplace investing at Fidelity Investments, said in a press statement.

Balancing Act

Average account balances across IRAs, 401(k)s and 403(b)s dipped slightly from the previous quarter, but the longer-term trend remains positive, suggesting investors haven’t been overly shaken by geopolitical turmoil or market swings. “Consumers appear to be regaining confidence, particularly those who have remained employed and benefited from stronger markets, which has created a tailwind for retirement savings,” said Eric Berlin, founder of Edgewood Wealth Management. He noted that daily inflation pressures are still a hurdle, and clients are just adapting to higher prices rather than feeling relief.

According to Fidelity’s data:

• The average IRA balance reached roughly $131,400 in the first quarter, up 7% year over year.
• The average 401(k) balance climbed 11% to $141,000, while 403(b) balances rose 13% to $130,000.

The report also highlighted the growing role of company stock plans. When employees own a stake in the businesses they work for, retention tends to improve, and 43% of participants become first-time investors through those programs.

Work It Out. Today, nearly three out of four Americans say they have a plan in place to reach their retirement goals, according to other Fidelity research released earlier this year. Some of that optimism is tied to a changing view of what retirement actually looks like. For many people, fully leaving the workforce at 67 is no longer the only definition of retirement; they instead say they want to retire “when it feels right.” While there are affordability concerns, many Americans intend to keep working because they enjoy it or want to continue building wealth later in life.

Vacations are cool too, you know.