Average 401(k) savings rate hits a record high. See if you’re on track

The average 401(k) plan savings rate recently notched a record high — and the percentage is nearing a widely used rule of thumb.

During the first quarter of 2025, the 401(k) savings rate, including employee and company contributions, jumped to 14.3%, according to Fidelity’s quarterly analysis of 25,300 corporate plans with 24.4 million participants.

Despite economic uncertainty, “we definitely saw a lot of positive behaviors continue into Q1,” said Mike Shamrell, vice president of thought leadership for Fidelity’s Workplace Investing. 

The report found that employees deferred a milestone 9.5% into 401(k) plans during the first quarter, and companies contributed 4.8%. The combined 14.3% rate is the closest it’s ever been to Fidelity’s recommended 15% savings target.    

Two-thirds of increased employee deferrals during the first quarter came from “auto-escalations,” which automatically boost savings rates over time, usually in tandem with salary increases, Shamrell said.

You should aim to save at least 15% of pretax income each year, including company deposits, to maintain your current lifestyle in retirement, according to Fidelity. This assumes you save continuously from ages 25 to 67.

But the exact right percentage for each individual hinges on several things, such as your existing nest egg, planned retirement date, pensions and other factors, experts say.

“There’s no magic rate of savings,” because everyone spends and saves differently, said certified financial planner Larry Luxenberg, founder of Lexington Avenue Capital Management in New City, New York. “That’s the case before and after retirement.”

Don’t miss ‘free money’ from your employer

If you can’t reach the 15% retirement savings benchmark, Shamrell suggests deferring at least enough to get your employer’s full 401(k) matching contribution.

Most companies will match a percentage of your 401(k) deferrals up to a certain limit. These deposits could also be subject to a “vesting schedule,” which determines your ownership based on the length of time you’ve been with your employer.

Still, “this probably [is] the closest thing a lot of people are going to get to free money in their life,” he said.

The most popular 401(k) match formula — used by 48% of companies on Fidelity’s platform — is 100% for the first 3% an employee contributes, and 50% for the next 2%.