Record Retirement Savings: Americans Boost 401(k) and IRA Contributions as Markets Rebound

Retirement savers saw meaningful progress in the second quarter, with the average IRA balance climbing to a record $144,523, a 10% increase from a year earlier. Fidelity attributed the gains to a market recovery following the sharp sell-off triggered by the Iran war earlier in the year. By midweek, the Dow Jones Industrial Average was up roughly 10% for 2026, while the S&P 500 and Nasdaq Composite had each advanced about 12%, reflecting renewed confidence in the broader economy.

Stronger personal savings habits also played a major role. Combined employer and employee 401(k) contributions averaged 14.4%, just shy of Fidelity’s recommended 15% annual target. Workers themselves contributed a record 9.6%, and more than 81% of participants saved enough to receive their full employer match — a sign that many Americans continue to prioritize long-term financial security despite economic uncertainty.

IRA contributions surged as well, rising 36% compared with last year’s second quarter. Women who consistently contributed to a 401(k) for at least five years reached an average balance of $273,400, and female IRA investors saw their average balances rise 12% to $130,231.

Sharon Brovelli, president of Workplace Investing at Fidelity, said the data reflects a positive trend. “The combination of record account balances, strong savings behaviors and effective plan design tell an encouraging story about how Americans are approaching retirement,” she noted.

Still, the report highlighted areas of concern. 19.5% of workers carried an outstanding 401(k) loan — a slight increase from the previous year — and hardship withdrawals rose to 3%, up from 2.6%. Under IRS rules, hardship withdrawals are allowed only when savers face an immediate and heavy financial need, such as preventing foreclosure or covering unexpected medical expenses.

Financial planner Cathy Curtis cautioned that tapping retirement accounts should be a last resort. “The biggest downside is that borrowing or withdrawing from a 401(k) disrupts long-term retirement savings,” she told CNBC, underscoring the importance of maintaining discipline even during difficult times.

Fidelity’s analysis included 25.8 million 401(k) participants across 27,300 corporate plans as of June 30, 2026, offering one of the most comprehensive snapshots of how Americans are preparing for retirement.