401(k) Balances Hit Record $155,800 as Workers Keep Saving

American retirement savers had a strong second quarter. The average 401(k) balance hit a record $155,800, according to Fidelity Investments’ Q2 2026 analysis. That is up 10.5% from the first quarter.

The jump is the strongest quarterly growth since late 2020. A rising stock market did most of the work, but steady saving helped too.

Record savings rates

Workers saved at a record pace. The total average savings rate held at 14.4% for the second quarter in a row. That combines a record 9.6% employee contribution with a 4.8% employer match.

More than eight in ten workers saved enough to get their full employer match. That is free money many people leave on the table. About 12% of workers raised their contribution rate during the quarter.

A worrying trend

Not all the news is good. Hardship withdrawals rose to 3% of participants, up from 2.6% a year earlier. These withdrawals cannot be repaid. They also trigger income taxes and lose years of compound growth.

The rise came even as saving rates held steady. It shows a split. Many workers are doing well, but others are struggling with bills.

What you can do

First, make sure you save enough to get the full employer match. It is an instant 100% return on part of your money. Second, avoid touching retirement savings early unless it is a true emergency.

Some employers now offer emergency savings accounts alongside 401(k) plans. These can cover surprise bills without raiding retirement funds. Ask your HR department what options you have.

The power of starting early

Time matters more than timing. Fidelity’s data shows that workers who saved continuously for 15 years have average balances of $600,700. Compound growth does the heavy lifting.

Fidelity suggests saving 1 times your salary by age 30, 3 times by 40, 6 times by 50, and 10 times by 67. Most people are behind, but every extra dollar helps. Even small increases add up over decades.

Know your limits

For 2026, you can contribute up to $24,500 to a 401(k). Workers 50 and older can add an $8,000 catch-up, for $32,500 total. Those aged 60 to 63 get a super catch-up of up to $35,750 under new rules.

If you cannot max out, aim for the employer match first, then raise your rate 1% each year. You will barely feel it, but your future self will thank you.

Don’t panic in downturns

In early 2026, average balances fell to $141,000 as markets wobbled. Workers who stayed invested saw balances rebound to $155,800 three months later. Those who sold missed the recovery. The lesson is simple: keep saving through the ups and downs.