Americans’ 401(k) balances hit a record $155,800 in the second quarter of 2026, and the number of Fidelity accounts worth $1 million or more climbed to 769,000, up 30% from a year earlier.
The same quarterly report flagged a rising share of workers borrowing against or draining those accounts to cover daily expenses, exposing a widening gap between savers building seven-figure balances and those tapping their plans mid-career.
Fidelity’s second-quarter retirement analysis covers 27,300 employer-sponsored plans and 25.8 million participants, making it one of the broadest snapshots of how American workers save and invest for retirement.
Fidelity’s Q2 data shows record 401(k) growth across every account type
Average 401(k) balances surged 10.5% from the end of March 2026, representing a 13.1% increase from the same period a year earlier, Fidelity’s report showed.
That three-month stretch marked the strongest quarterly growth for retirement accounts since the fourth quarter of 2020.
The gains reversed a turbulent first quarter in which average balances fell 4% to $141,000, as geopolitical tensions and market volatility rattled portfolios across every retirement account type.
A broad stock market rally drove much of the recovery, with the S&P 500 climbing about 15% during the three months ending June 30, 2026.
Individual Retirement Account (IRA) balances jumped 10% to $144,523, and 403(b) accounts gained nearly 12% over the same period, Fidelity’s analysis showed.
Fidelity’s 401(k) millionaire count reveals the power of decades-long saving
The number of 401(k) accounts holding at least $1 million reached 769,000 at the end of June, up from 645,000 in the first quarter, while IRA millionaires rose to 684,140 from 571,622 over the same span, according to the Fidelity report.
The typical 401(k) millionaire is 58 years old and has been saving for an average of 25 years, with an individual savings rate of about 17.3% that climbs to a combined 25.8% when employer contributions are factored in.
Gen X made up 62% of the millionaire group, followed by baby boomers at about 31% and millennials at 6%, the analysis reported.
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Mike Shamrell, vice president of workplace thought leadership at Fidelity Investments, told Yahoo Finance that the record balances were built through years of steady payroll discipline rather than any short-term market bet.
“Much of the strong retirement savings we saw this quarter didn’t happen overnight … they’re often the result of years, and in many cases decades, of consistent saving and investing even during periods of economic uncertainty,” Shamrell said.
The 25.8% combined savings rate among the millionaire cohort shows that capturing the full employer match wasn’t an occasional decision but a recurring one baked into their payroll settings across decades of market ups and downs.
Workers who capture their full employer match build retirement wealth faster
The average employee contribution rate held at a record 9.6% during the second quarter, even as inflation and rising household costs squeezed budgets, according to Fidelity’s Q2 2026 retirement analysis.
The employer match functions as a guaranteed return that many workers leave unclaimed every pay period, a shortfall Fidelity has repeatedly identified as one of the most common 401(k) missteps.
About 18.8% of eligible employees did not contribute enough to capture their employer’s full match in the second quarter, Fidelity’s Q2 2026 analysis found.
A Financial Engines study, published in May 2015, drew on 2014 payroll data from 4.4 million participants at 553 companies. It estimated the typical worker who misses the full match leaves about $1,336 a year on the table.
That gap compounds to about $42,855 over 20 years at a conservative 4.5% return, and reaches roughly $142,270 for a 25-year-old saver over 40 years.
“Workers continue to prioritize their financial future, saving at record levels and taking advantage of valuable benefits such as employer matching contributions,” Sharon Brovelli, president of Workplace Investing at Fidelity Investments, said in the company’s second-quarter 2026 release.
Rising 401(k) loans and hardship withdrawals point to growing financial strain
Despite the headline milestones, 19.5% of Fidelity’s retirement savers carried an outstanding 401(k) loan in Q2, up from 19.2% at the end of March 2026, Fidelity’s quarterly data showed.
Hardship withdrawals reached 3% of participants, compared with 2.6% from 12 months earlier. Unlike a loan, which gets repaid with interest back into the account, a hardship withdrawal permanently reduces the balance and eliminates all future growth on that money.
The trade-off between current expenses and retirement savings signals that a meaningful share of workers are using retirement assets to manage daily costs rather than building long-term wealth.
About 46% of Americans said they do not expect to be financially prepared for retirement, Northwestern Mutual’s 2026 Planning and Progress Study found. The survey also reported that Americans now believe they need $1.46 million to retire comfortably, representing a $200,000 increase from 2025.
The 401(k) contribution check worth running before your next paycheck
Fidelity’s Q2 data points to payroll settings, not market timing, as the dividing line between the millionaire cohort and the other 25.8 million participants Fidelity tracks.
A typical employer match runs 50% on the first 6% of pay, and Fidelity’s plan mechanics let only future contributions count toward match eligibility going forward.
The employer match is one of the highest-return, lowest-risk benefits available inside a 401(k), and the second-quarter data show it remains the clearest dividing line between the savers reaching seven-figure balances and those falling behind.
Vanguard’s How America Saves 2026 report found similar patterns, noting that participants who capture their full match consistently across a career accumulate roughly twice the balance of those who miss it in even a handful of years.
For workers already in a plan, the practical implication is that the match formula and current contribution rate determine most of the long-term outcome, not fund selection, not market timing.
Match dollars not captured in earlier pay periods this year cannot be reclaimed, though every payroll still ahead counts toward future eligibility.
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