Average 401(k) and IRA balances just hit all-time highs, record high retirement account balances; according to Fidelity’s latest retirement analysis — but the same report shows a growing number of workers borrowing from those accounts to cover everyday expenses.
401(k) Balances Hit Record $155K — But 3% of You Are Raiding It for Bills: Record High Retirement Account Balances
This article breaks down the actual numbers behind the record balances, what’s driving them, how they compare across generations, and why “record high” doesn’t automatically mean “on track.”
The Headline Numbers
Retirement account balances hit new highs in the second quarter of 2026, according to Fidelity Investments, the country’s largest 401(k) recordkeeper. The average 401(k) balance rose 13.1% year-over-year to $155,800 — an all-time high, and the largest quarterly jump since the fourth quarter of 2020. The average IRA balance also set a record, climbing 10% year-over-year to $144,523. Average 403(b) balances followed the same pattern, rising to $145,000, an 11.5% jump from the prior quarter.
For context on the longer arc: Vanguard’s year-end 2025 data put the average 401(k) balance at $167,970, with a median of just $44,115 — both record highs for that plan population. The gap between those two figures — average versus median — is one of the most important things to understand about all of this data, and we’ll come back to it.
What’s Actually Driving the Record Balances
Two forces are doing the work here, and they’re compounding each other.
- A market rebound. Balances had dipped slightly in the first quarter of 2026 amid broader market volatility, including a sell-off tied to the Iran war earlier in the year. The subsequent recovery — with major indices posting strong gains through the second quarter — did much of the heavy lifting behind the record numbers.
- Record savings behavior. This part is less about markets and more about habits. The average employee 401(k) savings rate reached a record 9.6% in 2026, and the total combined savings rate (employee plus employer contributions) held at 14.44% for 401(k) participants — nudging closer to Fidelity’s commonly cited 15% target. More than 8 in 10 401(k) participants, 81.2%, are now saving enough to capture their full employer match. IRA contributions rose even more sharply, up 36% compared with the same quarter last year.
Plan design has quietly played a major role too. Vanguard’s data shows automatic enrollment and automatic escalation features continuing to push participation and savings rates upward without requiring workers to actively opt in. By the end of 2025, 69% of Vanguard participants were invested in professionally managed allocations — target-date funds, balanced funds, or managed accounts — an all-time high, up from 67% the year before. Trading activity, meanwhile, stayed extremely low: only 5% of non-advised participants made any exchanges, suggesting most savers are staying the course rather than trying to time the market, record high retirement account balances.
The Number Everyone Skips: Average vs. Median
Headlines built around “record high balances” almost always cite averages, and averages in retirement data are heavily skewed by a relatively small number of very large accounts. Vanguard’s year-end 2025 figures make the gap explicit: an average 401(k) balance of $167,970 sits alongside a median of just $44,115 — meaning the typical participant, at the midpoint of the distribution, has a fraction of what the average implies. Fidelity’s analyst commentary has noted that the average sits roughly at the 75th percentile of the distribution, which tells you how much a relatively small group of high earners and long-tenured savers pulls the average upward.
This isn’t a reason to dismiss the record-high headlines — the underlying savings behavior and market gains are real and broadly positive. But it’s a reason to treat “average balance” as a snapshot of overall system health, not a personal benchmark. A far more useful comparison for most people is the Federal Reserve’s Survey of Consumer Finances, record high retirement account balances; which puts median retirement savings for households aged 55 to 64 at around $185,000, against an average for that same group of $537,560 — the same skew, just visible closer to retirement age.
Who’s Benefiting Most
The gains aren’t distributed evenly across generations or genders, and the data highlights a few standout groups:
- Millennials posted the strongest balance gains of any generation in the most recent quarter, continuing a multi-year pattern of catching up as this cohort moves further into peak earning years.
- Long-tenured women savers are a notable bright spot: women who have continuously participated in a 401(k) for at least five years reached an average balance of $273,400. Female IRA investors saw their average balance rise 12% year-over-year to $130,231, and 72% of their IRA contributions are now going into Roth accounts, up 3.4 percentage points from a year earlier.
- Small-business retirement savers have grown fastest of all: retirement accounts tied to small businesses have grown 178% since 2021, with contributions up 46% over the same period. In the most recent quarter, small-business account contributions made up 28% of all retail retirement contributions, with SEP and SIMPLE IRAs accounting for nearly two-thirds of that small-business total.
The Complication: Rising Account “Leakage”
The same report carrying the record-high headlines also flagged a less encouraging trend underneath the surface. Despite balances climbing, a growing share of workers are treating their retirement accounts as an emergency source of cash. Roughly 19.5% of workers had an outstanding 401(k) loan in 2026, a figure that edged higher than the prior year, and hardship withdrawals also ticked upward. Financial professionals generally caution against borrowing from a 401(k), since money pulled out — and the loan repayments that follow — forfeits time in the market and the compounding growth that comes with it.
In other words: the aggregate story is genuinely positive — more saving, better plan design, strong market performance — record high retirement account balances; but a meaningful subset of savers are experiencing real financial strain at the same time the headline numbers look their best. Both things are true simultaneously, and neither cancels the other out.
What This Means for Your Own Retirement Planning
Record national averages are a useful signal of overall economic and market conditions, but they’re a poor substitute for your own numbers. A few more productive questions to ask instead:
- Am I capturing my full employer match? With 81.2% of participants now doing this, it’s one of the clearest, lowest-effort wins available — leaving it on the table is effectively declining free money.
- Where do I sit relative to age-based savings benchmarks, rather than relative to the national average? Common financial-planning benchmarks suggest roughly 1x salary saved by age 30, 3x by 40, 6x by 50, and 8x by 60 — figures grounded in your own trajectory rather than a national mean skewed by high earners.
- Am I using tax-advantaged catch-up contributions if I’m eligible? The 2026 401(k) contribution limit rose to $24,500, with an $8,000 standard catch-up for savers 50 and older, and an enhanced $11,250 catch-up available to those aged 60 through 63.
- Is my account allocation still appropriate for my timeline, given how much of the recent growth has come from market gains rather than contributions? A rising balance driven heavily by market performance is worth periodically rebalancing, not just enjoying.
The Bottom Line
Record high retirement account balances are a genuinely good macro signal — they reflect stronger savings habits, smarter default plan design, and a market recovery that’s lifted most portfolios. But “record high” describes an average, not a guarantee, and it sits alongside a quieter trend of more workers dipping into those same accounts to cover near-term financial pressure. The healthiest way to read this news isn’t “everyone’s retirement is fixed” — it’s a reminder to check your own savings rate, record high retirement account balances; your own employer match, and your own age-based benchmarks, rather than measuring yourself against a national average that a relatively small number of very large accounts are pulling upward.