Retirement savings in the United States have reached record levels, but more workers are also withdrawing money from their 401(k) accounts, according to a new Fidelity report.
The increase in withdrawals shows that saving for the future can coexist with the need to access money for immediate expenses.
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The average 401(k) plan balance reached $155,800 during the second quarter of 2026, according to Fidelity’s analysis.
This represents an increase of approximately 10% from the previous quarter and 13% over the past year.
Individual retirement accounts, known as IRAs, also reached a record high, with an average balance of $144,523.
It is important to remember that these figures are averages. They do not mean the typical worker has $155,800 saved, as balances can vary significantly based on age, income, and years of contributions.
401(k) Retirement Savings Hit Record $155,800, but Withdrawals Rise – PHOTO: Shutterstock Why Are More Workers Withdrawing Retirement Savings? As balances grew, Fidelity also recorded an increase in the use of retirement accounts for immediate financial needs.
The problem is that accessing those funds before retirement can have long-term consequences.
According to CNBC, financial experts often advise against 401(k) loans because money removed from the account loses the opportunity to continue growing through compound interest.
Withdrawing money from a 401(k) can help resolve an emergency, but it can also reduce the amount available when you retire. Before doing so, consider other alternatives:
If using a 401(k) is unavoidable, it is essential to understand the true cost of withdrawing that money before making a decision.
