In the second quarter of 2026, retirement savings in the United States reached unprecedented levels, marking a significant milestone for long-term investors. Despite widespread economic concerns, the number of 401(k) millionaires hit a record high, reflecting a strong commitment to retirement planning.
Fidelity Investments reported that the average savings rates remained at historic highs, with investors focusing on their long-term financial goals. This trend underscores a resilient approach to retirement planning, even amidst economic uncertainties.
Economic Concerns vs. Personal Optimism
While many Americans are worried about the cost of livinginflation and geopolitical situations their personal financial outlook remains positive. Mike Shamrell, vice president of thought leadership at Fidelity, noted that when asked about their personal situation, people are somewhat more optimistic.
The total average savings rates for 401(k) savers stood at 14.4%, and for 403(b) savers at 12%, close to Fidelity’s recommended 15% benchmark. This was driven by a record-high employee contribution rate of 9.6%, combined with an average employer savings rate of 4.8%. Notably, 12.1% of 401(k) savers increased their contribution rate, and over 81% saved enough to receive their employer’s full matching contribution.
The Impact of Market Performance
The S&P 500 experienced a remarkable 15.2% jump in the second quarter, its strongest performance since Q2. This market surge significantly boosted retirement account balances. The average 401(k) balance reached $155,800, up 10.5% from the previous quarter, marking the strongest quarterly growth since Q4. The median 401(k) balance was $35,800, while the average 403(b) balance was $145,000, with a median of $36,837. For IRAs, the average balance was $144,523, with a median of $10,538.
Sharon Brovelli, president of Workplace Investing at Fidelity Investments, highlighted the encouraging story of Americans’ approach to retirement. She emphasized that workers are prioritizing their financial future by saving at record levels and taking advantage of employer matching contributions, which play a crucial role in long-term retirement readiness.
Long-Term Focus Amid Market Fluctuations
Despite market fluctuations earlier in the year and broader economic concerns, retirement savers remained focused on their long-term goals. Only 5.5% of retirement savers made changes to their asset allocation during the second quarter. Shamrell advised against making changes based on short-term events, emphasizing that retirement savings is a marathon, not a sprint.
However, there was a slight increase in retirement-account loans, rising to 19.5% from 19.2% a year ago. This indicates that roughly one out of every five people on Fidelity’s retirement platform has a loan outstanding. Shamrell attributed this to insufficient emergency savings, as many turn to their retirement funds during financial crunches. Financial experts typically recommend having enough savings to cover three to six months’ worth of basic living expenses.
Hardship withdrawals also saw an increase, totaling 3% in the second quarter, up from 2.6% a year ago. These withdrawals, which require proof of an immediate and heavy financial need, are taxed as ordinary income and incur a 10% penalty for those under age 59½. Examples of such needs include avoiding eviction or foreclosure, receiving medical care, and paying for funeral expenses or tuition.
Shamrell noted that people are starting to build their understanding of retirement, emphasizing the importance of maintaining good habits for long-term financial health.
