The average 401(k) balance reached a record $127,000 in the first quarter of 2026, according to Fidelity Investments, driven by strong market performance and continued contribution increases by workers who have maintained their retirement savings discipline.
Workers in their 50s saw the most significant gains, with average balances reaching $263,000, representing a 22 percent increase from the previous year. "The combination of market gains and consistent contributions is creating meaningful retirement progress," said Fidelity Vice President Luke McCarthy.
The participation rate in 401(k) plans remains high, with 75 percent of eligible workers contributing to their accounts. The average contribution rate has increased to 8.7 percent of salary, up from 7.9 percent five years ago.
Financial advisors recommend that workers take advantage of employer matching contributions and consider increasing contribution rates during market downturns when prices are lower. "Consistency matters more than timing," said certified financial planner Karen Mitchell.
The strong market performance has also benefited individual retirement accounts, with IRA balances averaging $134,000 across all age groups. However, retirement savings experts note that many Americans still fall short of recommended savings targets.