401(k) Savers Set Records: 769,000 Accounts Now Hold $1 Million or More, Fidelity Data Shows
Key Takeaways
- •Employees contributed an average of 9.6% of pay to 401(k) plans, while employers added 4.8%.
- •A total of 12.1% of 401(k) participants increased their contribution rates during the second quarter.
- •Average balances were $155,800 for 401(k) accounts, $145,000 for 403(b) accounts, and $144,523 for IRAs.
- •Millennials recorded 14.2% quarterly and 26.1% annual growth in average 401(k) balances.
- •The share of savers with an outstanding 401(k) loan increased from 19.2% to 19.5% during the quarter.
Despite persistent financial pressures, American workers remain committed to their retirement goals, with many increasing their contribution rates — and watching their savings climb to new highs.
According to Fidelity Investments' latest quarterly analysis, 769,000 retirement savers now hold $1 million or more in their 401(k) accounts. Average 401(k) balances grew 10.5% in the second quarter, marking the strongest quarterly growth since the fourth quarter of 2020, thanks in part to stock market gains. That increase reflects both ongoing contributions and changes in account values, so quarterly balance growth can vary with market performance.
The total average savings rate also held at record levels for the second consecutive quarter, remaining at 14.4% for 401(k) savers and 12% for 403(b) participants.
At the same time, Fidelity's data shows more savers tapped their accounts for cash to cover expenses. In the second quarter, 19.5% of retirement savers had an outstanding 401(k) loan, up from 19.2% at the end of the first quarter, while the share of workers who took a hardship withdrawal increased year over year to 3%.
Taken together, the figures show that strong contribution rates and higher account balances existed alongside signs that some households were using retirement accounts to manage near-term financial needs.
Record Contribution Rates Despite Inflation Pressure
The latest inflation data show continued pressure on household budgets, with costs rising across the board, from gasoline to groceries. The Consumer Price Index recorded month-over-month declines in some prices in July, yet the index was still 3.4% higher than a year earlier.
Even so, employees have been contributing an average of 9.6% of their pay to their 401(k) accounts — a record high — while employers contributed an average of 4.8%. In the second quarter, 12.1% of 401(k) participants increased their contribution rate, and 81.2% contributed enough to receive their employer's full matching contribution. IRA savers increased their contributions by 36% compared with the second quarter of last year.
Here is where average retirement savings balances stand:
- Average 401(k) balance: $155,800
- Average 403(b) balance: $145,000
- Average IRA balance: $144,523
How Each Generation Stacks Up
Millennials' average 401(k) balances increased 14.2% during the quarter and 26.1% year over year, according to the latest data. Millennials and Generation X employees were the highest contributors to traditional IRA contributions, both averaging approximately $6,000.
An account balance that falls short of the average does not necessarily mean a saver is behind — retirement account balances commonly vary widely across generations. Separate figures from Fidelity found that average 401(k) and IRA balances for each generation range from $8,000 to $286,700:
| Generation | Average 401(k) balance | Average IRA balance |
|---|---|---|
| Baby boomers | $260,300 | $286,700 |
| Generation X | $215,600 | $118,700 |
| Millennials | $82,600 | $26,700 |
| Generation Z | $18,000 | $8,000 |
It is also important to consider how individual retirement savings goals, external sources of income, timeline, and other factors affect a saver's account target and progress toward it at any given stage.
"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.
How to Catch Up on Retirement Savings
For savers who look at their account balance and think they may be behind, there are several ways to work toward boosting retirement savings.
Capture the Full Employer Match
If an employer offers to match retirement contributions, it makes sense to increase contributions enough to receive the full match. For example, if an employer offers a 3% match on retirement contributions, aiming to save even just 3% of income would bring total savings to 6% of annual income — and savers can work toward a larger percentage as their income grows.
Take Advantage of Catch-Up Contributions
Savers aged 50 and older are eligible to make catch-up contributions to certain retirement accounts, allowing them to contribute more than the standard annual limits and give their accounts an added boost.
For 2026, savers 50 and older with 401(k), 403(b), and 457 plans, as well as the federal government's Thrift Savings Plan, can make catch-up contributions of up to $8,000. Those aged 60 to 63 can contribute an additional $11,250 in 2026 in lieu of the $8,000, if their plan allows.
Look for Ways to Boost Income
Boosting income makes it possible to increase retirement contributions, which in turn grows retirement savings and helps the balance earn more in interest. If there are no current opportunities for a promotion or raise at a worker's current job, they might consider taking on a side hustle or exploring higher-paying roles.
"Review your investment strategy, debt, taxes, Social Security strategy, and retirement timeline," Seymour said. "Sometimes the solution isn't one giant change, but finding several smaller opportunities across the entire financial picture."
"The most important thing is to stop waiting for the 'perfect' time to start," he added. "The best financial plan is like the best workout plan or diet — it's the strategy that you actually implement and stick with."
