Americans appear to be refocusing on investing for their future after a few years of saving less and investing more conservatively in response to the pandemic and the subsequent economic challenges. Retirement savings account balances are up for the second quarter in a row due to improving market conditions and an increase in contributions from employers, according to Fidelity Investments' Q1 2023 Retirement Trends analysis, which analyzes 44.5 million IRA, 401(k) and 403(b) retirement accounts.

The average 401(k) balance increased to $108,200, up 4% from the fourth quarter of 2022 and 5% from 5 years ago. The average 403(b) account balance increased to $97,900, up 6% from the previous quarter and up 16% from 5 years ago.

In addition, total 401(k) savings rates increased to 14%, up from 13.7% in Q4 2022 and near Fidelity's suggested savings rate of 15%, including employee and employer contributions. Boomers still working are saving at the highest rate – 16.7% – and Gen Z has bumped its average savings rate to 10.5%, up from 10.2% last quarter. Furthermore, this generation's average 401(k) account balance increased by 17% over last quarter, the highest of any age group. Gen Z account balances are up 34% from the first quarter last year, which makes them the generation with the most account growth year over year.