Age-Related Average IRA Amounts
In the first quarter of 2025, Individual Retirement Account (IRA) balances have been under the spotlight, with Fidelity Investments providing valuable insights into the average IRA balances by age and generation.
According to the data, the average IRA balance for Gen Z, those aged between 12 and 27 years, stood at $6,783. Millennials, aged 28 to 43, had an average IRA balance of $24,241, while Gen X, with ages ranging from 44 to 59, had an average IRA balance of $100,431. Boomers, aged 60 to 78, had the highest average IRA balance at $250,209.
Compared to the fourth quarter of 2024, there were slight decreases in average IRA balances for Millennials, Gen X, and Boomers, but a small increase for Gen Z. The overall average IRA balance across all ages was approximately $121,983 at the end of Q1 2025, a 1% decline from a year earlier.
As for the second quarter of 2025, equity markets rebounded strongly after Q1 losses, which likely contributed to some recovery or growth in retirement account values, including IRAs. However, precise updated IRA balance figures for Q2 2025 by age or generation have not yet been released. Given the strong second quarter market rebound, it is reasonable to infer that IRA balances probably improved modestly compared to Q1 2025 levels, but exact numbers are unavailable.
When it comes to retirement savings, different generations show the expected trend of higher average IRA balances with age due to longer saving periods and compound growth. Gen X is reported elsewhere to have a median retirement savings of about $82,000, while Boomers have substantially more, approximately $289,000, highlighting differences in retirement preparedness. Younger generations like Gen Z and Millennials have comparatively low average IRA balances but may rely more on alternative assets or other retirement vehicles such as 401(k)s.
For those looking to boost their IRA savings, planning on saving a little more in future years, say 1% more each year, when you get your annual raise, can be a simple yet effective strategy. Additionally, automating IRA contributions by setting up automatic contributions that coincide with each pay period can help streamline the process and ensure consistent savings.
Another important aspect to consider is the type of IRA. Roth IRAs offer more flexibility in getting at your money without paying an IRS penalty, as contributions are made with after-tax dollars. Rolling over old retirement accounts and balances into a single IRA is also a good way to consolidate your accounts and avoid penalties.
In terms of contributions, the IRS limit on IRA contributions in 2025 is $7,000 (or $8,000 for those 50 or older). Participants in 401(k) plans can 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 will be able to make a super catch-up contribution of $11,250 in 2025.
IRAs account for nearly 40% of the total retirement assets, making them a significant part of the retirement landscape. They can serve as a great diversification tool, offering a wider range of investment choices than a 401(k).
In conclusion, while precise IRA balance figures for Q2 2025 by age or generation are not yet available, the strong market rebound in Q2 2025 suggests that IRA balances probably improved modestly compared to Q1 2025 levels. The average IRA balances for Q1 2025 illustrate significant growth with age and generation, reflecting decades of contributions and market growth. Strategies such as automating contributions, saving a little more each year, and considering a Roth IRA can help individuals optimise their retirement savings.
- To further grow your personal-finance situation, setting up automatic IRA contributions that align with each pay period could be a beneficial strategy, as it ensures consistent savings and can help boost your IRA balance.
- When contemplating retirement investing, it's worth noting that Roth IRAs offer a degree of flexibility, as they are funded with after-tax dollars, potentially providing more access to your savings without incurring an IRS penalty.
