The average 401(k) plan savings rate recently notched a new 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 pre-tax 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%.

A few months of market swings have taken a toll on retirement savers.

The average 401(k) balance fell 3% in the first quarter of 2025 to $127,100, according to a new report by Fidelity Investments, the nation’s largest provider of 401(k) plans.

The average individual retirement account balance also sank 4% from the previous quarter to $121,983, the financial services firm found. Still, both 401(k) and IRA balances were up year over year.

The majority of retirement savers continue to contribute, Fidelity said. The average 401(k) contribution rate, including employer and employee contributions, increased to 14.3%, just shy of Fidelity’s suggested savings rate of 15%.

“Although the first quarter of 2025 posed challenges for retirement savers, it’s encouraging to see people take a continuous savings approach which focuses on their long-term retirement goals,” Sharon Brovelli, president of workplace investing at Fidelity Investments, said in a statement. “This approach will help individuals weather any type of market turmoil and stay on track.”

U.S. markets have been under pressure ever since the White House first announced country-specific tariffs on April 2.

Since then, ongoing trade tensions between the U.S. and European Union as well as China, largely due to President Donald Trump‘s on-again, off-again negotiations, caused some of the worst trading days for the S&P 500 since the early days of the Covid-19 pandemic.

However, more recently, markets largely rebounded from earlier losses. As of Wednesday morning, the Dow Jones Industrial Average was roughly flat year-to-date, while the Nasdaq Composite and S&P 500 were up around 1% in 2025.

Intervening, or trying to time the market, is almost always a bad idea, said Gil Baumgarten, CEO and founder of Segment Wealth Management in Houston.

“People lose sight of the long-term benefits of investing in volatile assets, they stay focused on short-term market movements, and had they stayed put, the market would have corrected itself,” he said. “The math is so compelling to look past all that and let the stock market work itself out.”

For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published last year.

And, although stocks go up and down, the S&P 500 index has an average annualized return of more than 10% over the past few decades. In fact, since 1950, the S&P has delivered positive returns 77% of the time, according to CNBC’s analysis.

“Really, you should just be betting on equities rising over time,” Baumgarten said.

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Americans have a near-record level of credit card debt — $1.18 trillion as of the first quarter of 2025, according to the Federal Reserve Bank of New York. The average credit card debt per borrower was $6,371 during that time, based on data from TransUnion, one of the three major credit reporting companies.

Many people don’t understand why a common strategy that can help them pay down that debt — paying bills on time — isn’t all it takes to improve their credit. Separating fact from fiction is essential to help you pay down debt and raise your credit score. 

Here’s the truth behind a common credit myth: 

Your credit score is a three-digit numerical snapshot, typically ranging from 300 to 850, that lets lenders know how likely you are to repay a loan. The average American’s score is 715, according to February data from scoring brand FICO.

Here’s what you need to know about on-time payments and your credit:

For example, making on-time payments on buy now, pay later, or BNPL, loans may not help your credit score, even though 62% of BNPL users incorrectly believe they will, according to a new LendingTree survey.

While some BNPL providers do report certain loans to the credit bureaus, this is not a universal practice. And BNPL users may see a negative credit impact if they fall behind.

“Some BNPL lenders will report missed payments, which can hurt your score,” said Matt Schulz, chief consumer finance analyst at LendingTree and author of “Ask Questions, Save Money, Make More.”

An easy way to check what payments are and aren’t influencing your credit: take a look at your credit report. You can pull it for free, weekly, for each of the major credit reporting agencies at Annualcreditreport.com.

While payment history can account for 35% of your score, according to FICO, it’s not the only factor that matters. How much you owe relative to how much credit you have available to you — known as your “credit utilization” — is almost as important, at about 30% of your score. 

Higher utilization can hurt your score. Aim to use less than 30% of your available credit across all accounts, credit experts say, and keep it below 10% if you really want to improve your credit score. 

A 2024 LendingTree study found that consumers with credit scores of 720 and up had a utilization rate of 10.2%, compared with 36.2% for those with credit scores of 660 to 719.

“Don’t settle for B+ when you can go for the A+,” said Espinal, who is also the author of “Mind Your Money” and a member of the CNBC Global Financial Wellness Advisory Board. “You want to use less than 10% to really boost your score significantly.”

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