Fidelity Investments reported Thursday that average 401(k) balances reached an all-time high of $155,800 in the second quarter of 2026, a 13.1% increase from a year earlier. Fidelity, which administers more 401(k) plans than any other firm in the country, said the result was the best quarterly showing since the fourth quarter of 2020.
The average IRA balance also hit a record, rising 10% year over year to $144,523 in the second quarter, the company said. Gains were driven by a market rebound following a sell-off earlier in the year sparked by the Iran war. Through Wednesday's close, the Dow Jones Industrial Average had gained approximately 10% since January, and both the S&P 500 and Nasdaq Composite were up about 12% on the year.
Savings behavior also contributed to the record balances. Combined employer and employee 401(k) contributions averaged 14.4%, a rate that narrowly trails the 15% annual target Fidelity recommends savers aim for. The employee portion reached a record-high 9.6%, the company said. More than 8 in 10 401(k) participants — 81.2% — saved enough to capture their employer's full matching contribution.
IRA savers increased contributions by 36% compared with the second quarter of last year, Fidelity said. Women continuously participating in a 401(k) for at least five years reached an average balance of $273,400, while the average balance for female IRA investors rose 12% year over year to $130,231.
"The combination of record account balances, strong savings behaviors and effective plan design tell an encouraging story about how Americans are approaching retirement," Sharon Brovelli, president of Workplace Investing at Fidelity Investments, said in a statement.
Despite the record balances, there were signs of financial strain. Nineteen and a half percent of workers had an outstanding 401(k) loan in 2026, a figure that edged higher compared with the prior year, and the portion who took a hardship withdrawal climbed to 3% in the second quarter from 2.6% twelve months earlier, according to CNBC. Under IRS rules, savers qualify for a hardship withdrawal — which carries no early-withdrawal penalty — only when they face what the agency defines as an immediate and heavy financial need, examples of which include preventing a home foreclosure or paying for unforeseen medical bills.
Cathy Curtis, a certified financial planner and founder and CEO of Curtis Financial Planning, cautioned CNBC that workers should exhaust other options before turning to their 401(k). "The biggest downside is that borrowing or withdrawing from a 401(k) disrupts long-term retirement savings," Curtis said.
Fidelity's analysis covered 25.8 million 401(k) participants across 27,300 corporate defined contribution plans as of June 30, 2026.