401(k) and IRA Balances Just Dropped—Here's What Retirees Should Do Now

Those who are retired or about to retire may have been feeling stressed out about the state of the economy as changes in the stock market caused some accounts to fluctuate. Now, a new report from Fidelity highlights just how much has changed during the first quarter of the new year, and just how big of a hit those 401(k) and IRA accounts took.

Keep reading to see what the report says about the current state of retirement savings.

Related: Your Current Retirement Strategy Might Not Survive the 2026 Inflation Surge

Average Retirement Balances Have Dropped

According to the report, the average retirement account balances have taken a hit, with the following breakdown:

• IRAs are down 4 percent from Q4 in 2025
• 401(k)s are down 4 percent from Q4 in 2025
• 403(b)s are down 3 percent from Q4 in 2025

However, the news isn’t all bad, since balances are up 22 percent, 14 percent, and 21 percent, respectively, compared to where they stood in Q1 2021. In fact, Fidelity notes that while the balances dipped at the start of 2026, they were actually up over a variety of time frames, including “one, five, and 10 years ago.”

More People Increased Their Savings Rates and Adoption

The report had more good news, including that almost one in five 401(k) users increased their savings rate in the first quarter. Additionally, IRA contributions were up 29 percent year-over-year. Fidelity notes that Roth IRAs were likely the driving factor.

“Retirement savers started the year strong with record-high savings rates and contributions, reflecting the long-term approach they’re taking with retirement preparedness,” Sharon Brovelli, President of Workplace Investing at Fidelity Investments, said in a statement about the report. “While it can be tempting to make changes to retirement savings during market volatility, it is positive to see participants stay the course with their contributions–an approach that will strengthen their outcomes as retirement nears.”

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One Generation Saw a Big Increase in Savings

Fidelity says that all of this broke down generationally, with just 5 percent of Millennials adjusting their assets during the first quarter of 2026, indicating that this generation decided to stay the course amid market turbulence. However, younger generations may have been looking more towards the future, according to the report, since Gen Z’s total IRA contributions increased by a whopping 65 percent year-over-year.

And that’s not all: more than one in five Gen Z savers also contributed to a Roth 401(k). That’s probably part of the reason Fidelity says this generation is leading in IRA growth.

Related: Americans Are Terrified of This Retirement Issue More Than Death

That’s great news for these younger generations, since those compound earnings can really start to add up as they get closer to retirement. That’s because this early and robust adoption of retirement savings plans puts them in a better position not only to retire on time but also to keep themselves financially afloat throughout their golden years. With some retirees saying their biggest fear is outliving their retirement savings, this could go a long way toward easing this generation’s mind and giving them enough money to ensure their nest egg is padded.

Disclaimer: This article is for informational purposes only and does not constitute financial advice.