Thanks to a bullish market, Individual Retirement Account (IRA) balances ended 2025 up more than 7% from where they started the year. Did your IRA keep pace? Or fall behind?
The answer likely depends on your investment behavior at the end of 2022, the last time the U.S. stock market suffered a calendar year loss. The S&P 500's 18% slide three years ago shrank the average IRA balance to $105,000 by the end of the fourth quarter of 2022. Hopefully, you didn't sell in a panic or stop contributing to your IRA.
Why? Because three straight years of double-digit percentage gains for U.S. stocks pushed the average IRA balance up nearly 31% to $137,100, fourth quarter 2025 Fidelity data show. So, if you bailed out of stocks due to fear and didn't get back in quickly, you likely missed a good chunk of the multi-year rally.
So, do you suffer from IRA balance envy? The answer likely depends on how your IRA stacks up versus other savers in your age group. Eyeballing average IRA account balances can give you an idea if you're ahead in the savings game, keeping up, or falling behind.
Average IRA balance by age and generation
The average IRA balance for all ages at the end of the fourth quarter of 2025 was $137,100, according to Fidelity Investments' analysis of 18.9 million IRA accounts.
Let's drill down to average IRA balances by age and generation in the fourth quarter of 2025 to get a more precise picture of how much other workers in your age band have set aside. These totals include contributions, appreciation, and rollovers.
Here are the average IRA balances by age and generation for the fourth quarter of 2025 and the third quarter of 2025, according to Fidelity Investments.
Generation |
Age Range |
Average IRA Balance 2025 Q4 |
Average IRA Balance 2025 Q3 |
|---|---|---|---|
Gen Z |
Born 1997-2012 / Age 14-29 |
$8,010 |
$8,019 |
Millennials |
Born 1981-1996 / Age 30-45 |
$29,400 |
$29,410 |
Gen X |
Born 1965-1980 / Age 46-61 |
$120,300 |
$120,273 |
Boomers |
Born 1946-1964 / Age 62-80 |
$287,600 |
$287,640 |
Here is a summary of other findings from the Fidelity report.
- IRA gains of 7.5% in 2025 were due in part to a 17.8% return posted by the S&P 500 stock index in 2025, as well as consistent savings by IRA investors.
- IRA balances can grow through compounding interest, regular contributions and long-term stock market appreciation
- Roth IRAs are the most popular retirement savings choice among younger generations
What the experts are saying about IRA balance changes
Erin Kolo, Baird:
There are two lessons to glean from the latest snapshot of IRA balances, says Erin Kolo, senior VP and manager, PWM equity and fixed income research at Baird.
"The first is that it is super important to choose an investment strategy that you can stick to, regardless of market turbulence. The second lesson is the importance of ensuring that your IRA is invested appropriately so that it can weather drawdowns, especially for those closer to retirement."
Bob Mascialino, Fidelity:
"Americans are clearly considering all the savings options available to them in an effort to solidify their financial futures," said Bob Mascialino, president of wealth at Fidelity.
Emelia Fredlick, Morningstar:
Despite periodic market volatility, such as recent turbulences caused by the U.S. attack on Iran, there's no need to think short-term, notes Emelia Fredlick of fund-tracker Morningstar. After analyzing stock market crashes over the past 150 years, Fredlick concluded: "Though they varied in length and severity, the market always recovered and went on to new highs. If you don't panic and sell your stock holdings when the market crashes, you will be rewarded in the long run."
The care and feeding of your IRA
With traditional pensions on the verge of extinction, saving for retirement increasingly falls on workers. IRAs are an especially important savings tool for self-employed folks and small business owners who don't have a workplace retirement plan. Assets in IRAs totaled $18.9 trillion at the end of September 2025 (the latest available data), accounting for 40% of total retirement assets of $48.1 trillion, according to the Investment Company Institute.
What jumps out from the Fidelity data is how IRA account balances for older, long-term savers balloon thanks to regular contributions and the tendency of stocks to rise over time. The takeaway (especially for younger savers)? It’s not impossible to accumulate a sizable nest egg.
What looks like a puny account balance today can add up to hundreds of thousands of dollars. Compounding, or earning returns on both your original investment and prior gains, is a powerful force in building retirement savings.
In fact, IRA balances at the end of December were 57% higher than they were 10 years ago, according to Fidelity. When it comes to saving for your golden years, Fidelity recommends saving 15% of your income, although that includes workers with 401(k)s who get a company match.
If savers have a workplace retirement savings plan, they should consider investing in an IRA only after saving enough in their 401(k) to receive the full company match. "An IRA is a great tool to use to continue to get tax-deferred growth," said Rob Leiphart, VP of financial planning at RB Capital Management.
Both traditional and Roth IRAs allow your contributions and gains to grow tax-free. However, traditional IRAs are funded with pre-tax dollars, which gives you an upfront tax deduction, but requires you to pay taxes on withdrawals at your regular income rate. In contrast, Roth IRAs are funded with after-tax dollars but come with tax-free withdrawals in retirement.
Nearly all (94%) of Gen Z contribute to a Roth account. Roth IRAs are also the top choice for millennials and Gen Xers, with 68% and 60%, respectively, contributing.
"Younger adults today may be more aware of retirement savings options due to increased access to information through social media and the internet," said Falko Hoernicke, senior portfolio manager at U.S. Bank Private Wealth Management.
What you should have saved, by age
- Fidelity recommends having at least six times your salary saved for retirement by age 50
- IRA account holders essentially doubled their money each decade until retirement, thanks to the power of compounding
- Generally, 'super savers' regularly contribute to a retirement account and max out contributions up to IRS limits
Let’s see how IRA balances by age, or savings during each decade of life, stacked up at the end of the fourth quarter of 2025.
To help savers get a better guesstimate of whether their savings are on track for a secure retirement, we’ve also included Fidelity's guidelines as to how much of one's salary should be saved by the start of each decade in a saver's life. For example, Fidelity recommends that someone turning 50 should aim to have at least six times their salary saved by then. So, if you earn $100,000 at age 50, you should have at least $600,000 set aside by then.
Age |
Avg. IRA balance Q4 2025 |
You Should Have Saved at Least |
|---|---|---|
20s |
$8,888 |
|
30s |
$22,970 |
Salary X 1 |
40s |
$60,490 |
Salary x 3 |
50s |
$136,012 |
Salary X 6 |
60s |
$259683 |
Salary x 8 (and 10 x by age 67) |
70+ |
$332,784 |
Again, notice the power of compounding when building wealth. In each 10-year period starting with savers in their 20s, IRA account holders essentially doubled their money each decade until retirement. The key takeaway: the modest average IRA balance of $60,940 in the 40s’ age bracket mushrooms into a quarter-million-dollar-plus nest egg two decades later.
The secret of "super savers," personal finance experts say, is regularly contributing to a retirement account like an IRA and maxing out contributions up to IRS limits if possible. They also recommend investing in stocks for growth during peak earning years and implementing a buy-and-hold strategy to capture the full benefits of compounding.
For a more comprehensive look at how your savings compare to peers, see our articles on The Average Net Worth by Age, The Average 401(k) Balance by Age and The Average Retirement Savings by Age. To get a handle on projected medical expenses, see Average Cost of Health Care by Age and US State.
Pros and cons of IRAs
- The biggest advantage of IRAs is the tax benefits they offer
- IRAs tend to offer a wider range of investment choices than a 401(k)
- One key drawback of IRAs is their much lower annual contribution limits compared to 401(k)s
- Early withdrawals from your IRA before age 59-1/2 trigger a 10% penalty (plus regular income tax), with fewer exceptions than 401(k) loans or hardship rules
The biggest perk of IRAs is the tax benefits they offer. IRAs, which are held in brokerage accounts, also offer a wider range of investment choices than a 401(k), which has a limited menu of options. “So, if you want to buy individual stocks, or if you want to do something that you can’t do within the confines of a 401(k) because it’s not one of those 20 or 25 investment options, then the IRA serves as a great diversification tool,” said Leiphart.
Roth IRAs also give you more flexibility in getting at your money without paying an IRS penalty. You can take out your contributions at any time, since you’ve already paid taxes on the money used to fund your Roth IRA.
IRAs are also a great landing spot for assets from old 401(k)s. Rolling over old retirement accounts and balances into a single IRA is a good way to consolidate your accounts.
On the negative side, the amount you can contribute to an IRA each year is much lower than the amount you can sock away in a 401(k). In 2025, for example, the IRS limit on IRA contributions is $7,000 (or $8,000 for those 50 or older). (The deadline for 2025 IRA contributions is April 15, 2026.). In contrast, participants in workplace 401(k) plans were only able to contribute up to $23,500 and $31,000 for 50-and-older savers in 2025. Savers in 401(k) plans aged 60, 61, 62 and 63 were able to make a super catch-up contribution of $11,250 in 2025, if their company allows it.
Note that these contribution limits increase in 2026: The IRA contribution limit is $7,500 (up $500 from 2025) and the IRA catch-up is $1,100 (up $100 from 2025). Be sure to review income eligibility rules for IRAs.
Account Type |
2025 Limit |
2026 Limit |
|---|---|---|
IRA (Traditional or Roth) |
$7,000 |
$7,500 |
IRA Catch-up |
$1,000 |
$1,100 |
401(k) (Traditional or Roth) |
$23,500 |
$24,500 |
401(k) Catch-up |
$7,500 |
$8,000 |
401(k) Super Catch-up |
$11,250 |
$11,250 |
An IRA can help your retirement savings catch up
- Setting up automatic contributions to your IRA can help boost your retirement savings.
- Boosting your contributions when you get a raise can add up in future years.
- Saving in a workplace 401(k) doesn't mean you can't save in an IRA too.
Just because you’re saving in a 401(k), doesn’t mean you can’t save even more in an IRA.
One way to boost your retirement savings via an IRA is to automate the process by setting up automatic contributions that coincide with each pay period, just like your 401(k) at work, says Leiphart. And if you’re tight on cash now, you can plan on saving a little more in future years, say 1% more each year, when you get your annual raise, adds Leiphart.
Get the full story: what you're worth
Want to see how more of your retirement portfolio compares to peers? Read:
Average Retirement Savings by Age,
The Average 401(k) Balance by Age,
Average 401(k) Match: Do You Work for a Generous Company? and
The Average Social Security Check by Age.
