Americans Are Putting More Money Into 401(K)S This Year—See How You Compare

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Despite the stock market's poor performance since the beginning of the year, Americans have increased contributions to their 401(k) retirement accounts over the course of 2022, according to a recently published Fidelity study.

The S&P 500 dropped by about 5% in the last quarter, and that was reflected in a lowered average 401(k) balance of $121,700 — a 7% decrease from the previous quarter. But those poor returns didn't stop workers from increasing their 401(k) contributions by 0.1% in the first quarter of 2022. On average, Fidelity said, U.S. workers are now contributing 14% of their paychecks to those retirement accounts.

That's the highest savings rate recorded since Fidelity started tracking the metric in 2010, and just below Fidelity's recommended rate of 15%.

"While the market's performance does impact account balances in the near term, the majority of retirement savers continued to demonstrate positive savings behavior," Kevin Barry, president of Workplace Investing at Fidelity Investments, wrote in a statement accompanying the findings.

Fidelity's overall average 401(k) account balance may be an imperfect point of comparison for you — it includes accounts of all age groups, from entry-level employees to late-career corporate executives. Here's a more filtered breakdown, according to Fidelity data obtained by CNBC Make It:

  • Age 20-29: $14,600
  • Age 30-39: $51,200
  • Age 40-49: $120,200
  • Age 50-59: $206,100

If those numbers seem high to you, bear in mind that they're average numbers — which tend to skew higher than median numbers, due to the way small numbers of account holders with the highest total balances factor into the calculation.

The numbers also include employer contributions, which aren't available with every 401(k) plan. They don't include other retirement investments or funds, like Individual Retirement Arrangements (IRAs), brokerage accounts or cash savings.

A 401(k) or 403(b) account — especially with employer contributions — is one of the best ways to save for retirement. It might seem counterintuitive to make contributions when the market is down. But short-term volatility is relatively normal, and retirement accounts like 401(k)s are long-term investments meant to span decades.

The longer you keep money in a retirement account, the better it tends to perform — and the more money you put into it, the greater the effect. Fidelity's study found that the average 401(k) balance grows from $64,900 to $482,900 after just 15 years.

More than half of Americans surveyed by Bankrate last November said their retirement savings were not on track. But as CNBC noted at the time, you can often make up for lost time on retirement savings making catch-up payments or setting up an IRA, especially if you don't have an 401(k) or 403(b) through your employer.

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