401(k)s and other retirement accounts got a major boost this year.

According to Fidelity’s report, there’s an unprecedented growth in Americans' retirement savings—with Gen Z leading the pack. The average account balance for Gen Zers with a 401(k) grew an impressive 17% in the first quarter of 2023. A quarter before that, Gen Z added another 23%.

(Note that these are gains for the quarter, not average annualized percentages.)

With record employer contributors, the average balance of IRAs, 401(k)s, and 403(b)s also jumped to $105,030. This marks the second consecutive quarter of growing balances.

Yet personal finance experts say those savings are still far from ideal.

America’s retirement balances rack up gains

According to the report, Gen Zers aren’t just enjoying gains; they are consistently adding to their contributions.

Starting with a 10.2% 401(k) savings percentage to close out 2022, Gen Z was putting away 10.6% in 401(k) accounts the following quarter. That’s a good start, but it could be higher.

For perspective, Boomers contribute an average of 16.7% of their income to retirement.

“It’s encouraging that today’s younger generations have more financial awareness than any generation before them,” wrote Joanna Rotenberg, president of Personal Investing at Fidelity.

“This financial savvy can pay off in the long run, as making steady retirement contributions can help weather the inevitable financial downturns that will take place over time.”

Employer contributions to private pension accounts also swelled to 4.8% in 2023, with 85% of workers getting some form of employer contribution.

Rule of thumb: nest egg worth 15x your salary

While balances in America’s tax-advantaged retirement accounts are growing, they’re nowhere near where they should be.

In the past, personal finance professionals suggested aiming for a nest egg worth 10x your salary by the time you reach retirement.

But in a world with uncertain inflation, tax rates, trade policies, supply constraints, and other threats to your nest egg, savers may consider a larger cushion.

Fidelity’s rule of thumb today is saving “at least 15%” of your regular retirement income from ages of 25 to 67.

“Our 15% savings guideline assumes that a person retires at age 67, which is when most people will be eligible for full Social Security benefits. If you don't plan to work that long, you will likely need to save more than 15% a year. If you plan to work longer, all things being equal, your required saving rate could be lower,” says Fidelity.

That figure doesn’t include other long-term savings for large purchases or down payments.

So while fast-growing contributions and record retirement balances are a step forward, Americans are still merely catching up rather than pulling ahead.