American workers are saving more of their paychecks for retirement than at any time on record — even as the market volatility that dominated the first quarter of 2026 chipped away at account values. Fidelity Investments' latest quarterly retirement analysis, the most comprehensive recent read on U.S. retirement behavior, paints a picture of savers who are quietly holding the line while their balances fluctuate around them.
Balances Slip, But Long-Term Trend Still Positive
The average 401(k) balance stood at $141,000 as of March 31, 2026, down 4% from the previous quarter but still up 11% from Q1 2025, according to Fidelity's Q1 2026 Retirement Analysis. The average 403(b) balance — the plan type most common in the nonprofit and public sectors — came in at $130,000, off 3% quarter-over-quarter but up 13% from a year earlier.
The Investment Company Institute reported that total U.S. retirement assets stood at $47.6 trillion as of March 31, 2026, down 2.5% from December 2025. The decline reflects the broader market drawdown early in the year rather than any pullback in contributions.
Savings Rates Set New Highs
The most striking data point in the Fidelity report was the total 401(k) savings rate, which climbed to a record 14.4% — combining an average employee deferral rate of 9.6% (also an all-time high) with an average employer contribution rate of 4.8%. For 403(b) participants, the combined savings rate reached 12%.
"The consistency of savings behavior — even during periods of market stress — is what ultimately drives long-term outcomes," Fidelity noted in its analysis. The average quarterly employer contribution reached a record $2,080, surpassing the prior high of $2,020 a year earlier.
IRA Contributions Surge
Individual retirement accounts also saw strong momentum. Fidelity reported a record-high number of IRA account holders making contributions, up 28% year-over-year, with total IRA contributions rising 29% from the same period in 2025. Average IRA balances stood 7% above Q1 2025 levels.
Signs of Financial Strain Beneath the Surface
Not all the data was upbeat. More workers are tapping their retirement accounts to cover near-term expenses — a trend that analysts say reflects continued cost-of-living pressure. The share of workers with an outstanding 401(k) loan reached 19.2% at the end of Q1 2026, up from 18.8% a year earlier, and 2.4% of participants took out a new loan during the quarter, up from 2.3% in 2025.
Vanguard's data, released separately, showed that 401(k) hardship withdrawals hit a record 6% of participants in 2025, up from 5% in 2024 and just 2% in 2020. That trend has drawn attention from plan advisers, who generally view loans as a more financially prudent option than hardship withdrawals — since loan repayments go back into the participant's own account, while hardship withdrawals are taxed and cannot be repaid.
What It Means for Savers
The takeaway from the Q1 numbers is a familiar one for retirement professionals: staying the course matters more than reacting to any single quarter's returns. Fidelity's data shows that participants who continued their regular contributions through the quarter's volatility saw their long-term balances remain well above their year-ago levels, even after the recent drawdown.
With auto-enrollment and auto-escalation features increasingly built into workplace plans, participation and deferral rates have continued to march higher — providing a structural tailwind that helps insulate long-term balances from short-term market swings.
Sources: Fidelity Q1 2026 Retirement Analysis, Investment Company Institute Quarterly Retirement Market Data, CNBC, InvestmentNews, NAPA-Net, TheStreet.