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Americans’ 401(k) balances have reached a record high, with baby boomers saving the most and millennials seeing growth in their retirement accounts, according to new Fidelity data.
The average balance across Fidelity accounts rose to $155,800 in the second quarter of 2026, an increase of 10.5 percent from the previous quarter, which is the biggest quarterly gain since late 2020, according to Fidelity’s Building Financial Futures analysis. Newsweek has contacted Fidelity for comment on the findings via email outside of regular working hours and is awaiting a response.
The increase follows market fluctuations earlier this year, with Fidelity crediting strong investment performance and continued contributions for the improvement in balances. It also comes as rising living costs continue to squeeze household budgets which can often make retirement planning take the back bench: Bureau of Labor Statistics figures released last week show consumer prices were 3.4 percent higher in August than a year earlier.
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Greg Black, founder and senior wealth adviser at Tencap, said the gains were encouraging, although higher balances alone provide an incomplete picture of how prepared Americans are for their retirements.
"The numbers are encouraging, but I’d be cautious around interpreting record balances as a dramatic improvement in overall retirement preparedness," Black told Newsweek.
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Who Is Saving the Most?
A 401(k) is a workplace retirement plan that allows employees to save part of their wages with tax advantages. Employers can also contribute, including by matching money workers put into their accounts.
Baby boomers, many of whom are already retired or are close to retirement, held the largest average 401(k) balance, at $283,200, followed by Generation X at $240,700, according to Fidelity’s report.
They also contributed the highest share of their earnings. Boomers put an average of 12.2 percent of their own pay into their accounts, compared with 10.6 percent for Gen X. Those figures exclude employer contributions.
"Older workers generally have higher incomes, fewer competing financial priorities, and more urgency as retirement approaches, so it makes sense that they contribute a larger percentage of their pay," Black said.
For millennials, the latest quarter brought a substantial increase in the money accumulated. Their average balance rose 14.3 percent to $94,300, leaving it about 26 percent higher than a year earlier.
Gen Z workers, the youngest generation of savers, held an average of $20,800. Millennials contributed 9 percent of their pay, while Gen Z contributed 7.6 percent, again excluding employer contributions.
"Younger workers are starting from much smaller account balances, which means contributions, employer matches, and market gains can produce much larger percentage increases," Black said. "That said, it is still important for younger workers to establish a savings habit early, since savings and investments compound over time."
What Is Driving the Boost?
Across Fidelity’s plans, employees and employers together contributed an average of 14.4 percent of pay, unchanged from the previous quarter. Employees contributed 9.6 percent and employers contributed 4.8 percent, according to Fidelity.
Black said that steady savings rate suggested a meaningful portion of the increase in balances came from strong market performance.
"The indicator that matters the most is that people have strong contribution rates," he said. "That consistent saving and compounding ultimately matter much more than what markets do in a single quarter."
Employer matching remained an important source of retirement savings, with 81.2 percent of participants contributing enough to receive their employer’s full match, Fidelity found.
How Prepared Are Americans for Retirement?
The record comes against a backdrop of continued increases in everyday expenses. Food prices rose 2.7 percent over the year through August, while shelter costs increased 3 percent, according to the BLS.
The record balances recorded by Fidelity come alongside more cautious assessments of retirement preparedness recently. Just 35 percent of nonretired adults believed their retirement saving plans were on track in 2025, unchanged from 2024 and below 40 percent in 2021, according to the Federal Reserve’s latest household survey. That suggests the gains reported by Fidelity sit within a broader picture in which many Americans still feel uncertain about their financial future.
The Fed also found that only 15 percent of nonretired adults with family income below $25,000 had a tax-preferred retirement account, such as a 401(k) or IRA, compared with 89 percent of those with income of $100,000 or more. Fidelity’s rising balances show progress among its account holders, but the federal figures highlight how unevenly Americans of different income levels participate in retirement saving.
Even those with savings in situ can find their savings plans upended. The Fed reported 14 percent of nonretired adults borrowed from, cashed out or reduced contributions to their retirement accounts during the preceding year. People who experienced a major unexpected expense were more likely to remove funds from their retirement accounts.
Black cautioned that the average account balance cannot show how every household is coping. Fidelity’s findings cover its own customers, with the 401(k) analysis including 25.8 million participants across 27,300 corporate plans, according to the company’s methodology.
"An average 401(k) balance tells us something about people who have access to these plans and are actively participating, but it doesn’t tell us how the average American household is doing," he said.
Large accounts can pull up the average, Black added, while lower-income workers and people with inconsistent employment or no workplace retirement plan can face different challenges.
"Access, participation, and savings rates are just as important as the account-balance number."
Contact Newsweek editors on this story: Tobias Meyjes and James Debens
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