Even as they feel the squeeze from inflation, workers are saving more than ever.
The average retirement account balance just hit a record high, according to a new report from Fidelity. The average IRA now sits at $144,523 and the average 401(k) holds $155,800—both totals up 10% from the first quarter of the year.
The peak in retirement savings tracks with a winning streak for the stock market, which just experienced its strongest quarter of growth since 2020. Fidelity’s data, collected during the second quarter, showed that 401(k)s just notched their biggest balance gains since the end of 2020, too.
The average 401(k) savings rate didn’t change much in the second part of the year, hovering around 14.4% for the second quarter in a row. That number takes into account both employee and employer account contributions, as many companies offer some matching cash on retirement accounts. Fidelity recommends that savvy savers tuck away 15% of their annual earnings for retirement—a goal that’s much easier to hit for anyone stashing some coveted employer matching funds.
People with IRAs are also saving more. Individual retirement account holders boosted their total contributions by 36% compared with the same time last year. “The combination of record account balances, strong savings behaviors, and effective plan design tells an encouraging story about how Americans are approaching retirement,” Sharon Brovelli, president of workplace investing at Fidelity, said in the report.
“Workers continue to prioritize their financial future, saving at record levels and taking advantage of valuable benefits such as employer matching contributions.”
Savings grow but many people still struggle
Some of the savings this year come with a catch. In a comprehensive report published this summer, Vanguard found that 6% of account holders made a hardship withdrawal in 2025, up from 5% the year prior. Compared with the pre-pandemic era, the rate of people tapping into their retirement accounts early has tripled, rising every year for six years straight.
While accessing cash locked away in a retirement account can solve short-term financial problems, the downsides of pulling money out early are myriad. Early withdrawals can come with heavy fees, but the real risk is the loss of future compound interest. That’s valuable time for your money to make money that you can never get back.
While savers with emergency needs may be able to avoid some fees, pulling retirement funds out early remains a major financial misstep—yet the data suggests many people have no other option. Last year, the median early hardship withdrawal was only $1,900, which is enough to fill an emergency gap in a budget but not much more.