Fidelity Investments tracks 401(k) savings for more than 25 million American workers. Every quarter, those savers measure retirement progress by checking whether the account balance went up or down.
The number that drives long-term retirement outcomes is the percentage of each paycheck flowing into your 401(k), a figure most workers lock in during onboarding and never touch again.
Fidelity’s second-quarter 2026 retirement analysis puts the average 401(k) balance at a record $155,800, with 769,000 savers holding seven-figure accounts.
The same report reveals rising account leakage, with more workers borrowing from or draining their retirement funds to cover daily expenses.
Fidelity’s record 401(k) balance and the leakage building beneath it
Fidelity’s Q2 2026 retirement analysis covered 25.8 million participants across 27,300 corporate defined contribution plans. Average 401(k) balances rose 13.1% year over year, the largest quarterly gain since the fourth quarter of 2020, the report confirmed.
Average individual retirement account (IRA) balances reached a record $144,523, up 10% from a year earlier, Fidelity confirmed.
The 403(b) average climbed to $145,000, with stock market gains powering the rebound after balances fell 4% in the first quarter amid the Iran conflict, CNBC reported.
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The rebound did not stop more workers from tapping their retirement accounts under financial pressure. Outstanding 401(k) loans reached 19.5% of participants, up from 19.2% at the end of the first quarter, Fidelity’s data indicated.
Under Internal Revenue Service (IRS) rules, a hardship withdrawal is available only for an immediate and heavy financial need, and the distribution is still generally subject to income tax and the 10% early-withdrawal penalty for savers under 59½ unless a separate Section 72(t) exception applies, according to Fidelity.
Fidelity’s 14.4% savings rate approaches the 15% benchmark
The combined employee and employer contribution rate held at 14.4% for the second straight quarter, a record, Fidelity reported. Workers contributed an average of 9.6% of their pay, a new high, while employers added 4.8%.
Fidelity recommended a target of 15% of pre-tax income, assuming saving from age 25 through retirement at 67. Under that model, retirement assets cover about 45% of pre-retirement income, with Social Security bridging the rest.
Sharon Brovelli, president of Workplace Investing at Fidelity Investments, said the record contribution rate reflects households still funding long-term retirement goals even as short-term budget pressure persists.
<strong>Workers continue to prioritize their financial future, saving at record levels and taking advantage of valuable benefits such as employer matching contributions</strong>
About 81.2% of participants saved enough during the quarter to capture their employer’s full matching contribution, the report showed.
The remaining one in five fell short of collecting the full match, which Fidelity has described as free retirement dollars that would otherwise compound alongside the participant’s own contributions for the rest of their working years.
Generational 401(k) gaps show why one average tells an incomplete story
Baby boomers averaged $283,200 in their 401(k) accounts as of June 30, while Generation X averaged $240,700 and millennials averaged $94,300, Fidelity data showed.
Gen Z workers averaged $20,800, and both millennials and Generation X were Fidelity’s largest traditional IRA contributors, each averaging about $6,000.
The report confirmed that millennials posted the strongest momentum, with average balances climbing 26.1% year over year. Workers in their late 40s and early 50s face a widening shortfall against the salary-multiple benchmarks Fidelity sets for retirement readiness.
“Someone earning $75,000 with a pension, modest lifestyle, and plans to work until 70 likely needs a very different amount than someone earning $300,000, spending $200,000 a year, and wanting to retire at 55,” said Brian Seymour, CFP and founder of Prosperitage Wealth, in comments reported by Yahoo Finance.
The one 401(k) metric savers can adjust every pay period
About 12.1% of participants raised their contribution rate during the quarter, and 81.2% saved enough to capture their employer’s full matching contribution, Fidelity noted.
Workers aged 50 and older can defer up to $32,500 into a 401(k) in 2026. Those between the ages of 60 and 63 can contribute up to $35,750 under enhanced catch-up rules.
Those limits give late-career savers meaningful room to close the gap with a paycheck adjustment.
“Review your investment strategy, debt, taxes, Social Security strategy, and retirement timeline. Sometimes the solution isn’t one giant change, but finding several smaller opportunities across the entire financial picture,” Seymour said.
The rule that turns a 401(k) loan into a tax bill
For the 19.5% of Fidelity participants currently carrying a 401(k) loan, the exposure extends beyond the balance owed to the plan, because a job change can convert what began as a payroll-deducted repayment into a taxable event before the borrower has time to react.
Under Internal Revenue Service rules updated by the Tax Cuts and Jobs Act (TCJA), a worker who separates from their employer with an outstanding 401(k) loan has until the tax filing deadline of the following year, including extensions, to roll an equivalent amount into an IRA or a new employer’s plan.
For workers who miss that window, the outstanding balance becomes taxable income at year-end, converting what began as a routine payroll deduction into a full year’s tax liability.
