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By Donna Rosato
April 29, 2015

Some good news on the retirement front: The average 401(k) account balance reached a record high and workers are stashing away more in their plans, according to Fidelity, the largest retirement savings plan provider.

The average 401(k) held $91,800 in the first quarter of this year, up 3.6% from a year ago. Meanwhile, a record 23% of employees in Fidelity plans hiked their 401(k) contributions in the past year. The average savings rate, including both employer and employee contributions, climbed to 12.5%.

For employees in a 401(k) plan for 10 or more years, the average balance was a hefty $251,600, up 12% year over year. For those with both a 401(k) and IRA at Fidelity, the average combined balance rose 2.2% to $267,200.

Impressive, but it may not be enough. The Fidelity report doesn’t spell it out, but most of these gains are owed to the bull market, which will eventually fade. Meanwhile, the typical employee is still far behind in retirement saving.

That may seem counter-intuitive, given those lofty balances, but the averages are skewed upwards by high-income savers. The typical working household nearing retirement with a 401(k) and an IRA has a median $111,000 combined, which would yield less than $400 a month in retirement, according to a recent report by the Boston College’s Center for Retirement Research.

For households ages 55 to 64 earning $40,000 to $60,000 a year, the median balance in 401(k) and IRA accounts is just $53,000. For the same age group earning $138,000 or more, the median account is $452,000, according to CRR.

Financial planners recommend saving 10% to 15% of your income annually, starting in your 20s. The goal: amass 10 to 12 times your final annual earnings in order to have enough to maintain your standard of living in retirement. So if you make $60,000 a year, you should accumulate $600,000 to $720,000 by the time you retire.

That’s a tall order, and you could certainly live on less—many people do. Still, to have a shot at affording a decent retirement, you need to save consistently over the long term. And to do that, you need a plan, which gives a huge advantage to workers who have a 401(k).

According to the Employee Benefit Research Institute’s latest Retirement Confidence survey, those with 401(k) plans are much more optimistic about their retirement prospects: 71% of those with a plan are very or somewhat confident they will live comfortably in retirement, vs. just 33% of those who are not, EBRI found. Similarly, the CRR report shows that 68% of older households with the highest median retirement account balances had a 401(k) vs. just 22% for the group with the least savings.

Employers could be doing more to encourage that kind of savings behavior. Just one-third of 401(k) plans automatically enroll new workers but only 13% of companies automatically increase contribution rates each year, according to Fidelity.

To see if you’re on track, run your numbers on an online retirement savings calculator, such as those offered by T. Rowe Price or Vanguard. Get MONEY’s advice on how to make the most of your 401(k) at every stage of your life here. If you don’t have a 401(k), here’s what you need to know about IRAs.

Get more tips on investing for retirement:
What Is the Right Mix of Stocks and Bonds for Me?
How Many Funds Do I Need?
How Often Should I Check on My Retirement Investments?

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