Americans’ 401(k) balances reached a record $155,800 in the second quarter of 2026, marking a 10.5% increase from the previous quarter and a 13.1% rise from the same period last year. The data, released by Fidelity Investments on September 3, reflects the strongest quarterly gain since the fourth quarter of 2020.
The average 401(k) balance now stands at $155,800, up from $141,000 in the first quarter of 2026. Fidelity attributed the growth to a stock market rebound and consistent employee contributions, with the average combined contribution rate (employee + employer) holding steady at a record 14.4% for the second consecutive quarter. Employees contributed an average of 9.6% of their pay, while employers added 4.8%, bringing the total close to Fidelity’s recommended 15% annual savings target.
Other retirement account types also saw record highs. The average 403(b) balance rose to $145,000, up 12% from the first quarter, while the average individual retirement account (IRA) balance reached $144,523, a 10% increase both quarter-over-quarter and year-over-year. IRA contributions jumped 36% from the prior year.
Who is saving the most?
Baby boomers held the largest average 401(k) balance at $283,200, followed by Generation X at $240,700. Boomers also contributed the highest share of their earnings, allocating 12.2% of their pay to retirement accounts, compared to 10.6% for Gen X. Millennials saw growth in their balances but lagged behind older generations in average savings.
Market recovery and economic pressures
The gains follow a slight dip in the first quarter of 2026, during which balances fell amid market volatility. Fidelity noted that the rebound aligns with a strong stock market performance in the second quarter. However, rising living costs continue to strain household budgets, with consumer prices 3.4% higher in August 2026 compared to the previous year, according to Bureau of Labor Statistics data. This economic pressure has led some to question whether higher balances alone indicate improved retirement readiness.
Contribution trends and employer matches
More than 81% of workers contributed enough to receive their employer’s full matching contribution, a figure Fidelity described as a positive sign of savings discipline. Additionally, 12% of 401(k) participants increased their contribution rates during the quarter. The average IRA contribution rate saw a notable 36% year-over-year increase, suggesting growing engagement with retirement planning beyond employer-sponsored plans.
Expert perspectives on retirement preparedness
While the record balances are encouraging, some financial advisors caution against overinterpreting the data as a sign of widespread retirement security. Greg Black, founder and senior wealth adviser at Tencap, noted that higher balances do not fully capture the financial challenges facing many Americans. “The numbers are encouraging, but I’d be cautious around interpreting record balances as a dramatic improvement in overall retirement preparedness,” Black stated. He emphasized that factors such as lifespan, healthcare costs, and debt levels play critical roles in determining true retirement readiness.
Fidelity’s analysis underscores the role of consistent saving habits and market performance in driving the increases, but it does not account for individual financial circumstances, such as job stability, healthcare expenses, or other liabilities that may impact long-term savings goals.