dailynewsnblog
The start of 2026 was rough on retirement savers.
At the end of March, the average 401(k) balance with Fidelity Investments had fallen by 4% from the start of the year to $141,000, according to a new report.
The average Individual Retirement Account (IRA) balance dropped 4% to $131,400. And the number of retirement investors with $1 million or more in their accounts dropped right along with those dwindling accounts.
The lower account balances reflect the US market’s rocky first quarter: The S&P 500 (^GSPC) dropped 4.3%, the Nasdaq Composite (^IXIC) was down 7%, and the small-cap Russell 2000 (^RUT) was mostly flat.
Still, the average 401(k) balance is up 11% from the same time a year ago. The average 403(b) balance increased 13%, and the average IRA balance jumped 7% from the first quarter of last year.
“Despite some of the market volatility in the quarter, we saw more participants increasing their savings rate and fewer making changes to their asset allocation — both of which will help build a strong financial foundation for retirement,” Kirsten Hunter Peterson, a Fidelity vice president, told Yahoo Finance.
Savings rates hit record levels
Nearly 1 in 5 participants increased their savings rate, in large part due to automatic annual increases built into employer plans.
Both 401(k) and 403(b) total savings rates reached record levels in the first quarter, according to the report. The average employee savings rate is now 9.6%, and the average employer contribution rate is 4.8%. Fidelity’s suggested combined savings rate is 15%.
As for those millionaires, don’t cry for them yet. Yes, the number of 401(k) investors with $1 million or more in their retirement accounts dropped to 645,000, down 3% from last quarter, but the number of millionaires is still up 26% from a year earlier.
And while the number of IRA-created millionaires also decreased to 571,622, down 2% from last quarter, there are still roughly a third more than a year ago.
“The thing to remember when it comes to 401(k) and IRA-created millionaires is they reached this level of savings by making regular contributions to the same account with the same employer for many years,” Peterson said.
The average 401(k)-created millionaire is almost 59 years old and has been investing in the same account for an average of 25 years.
Tangled up in stocks
One factor that may have contributed to the modest quarterly slide in many retirement account balances is that more than 6% of savers have a 100% equity allocation in their 401(k)s, and nearly 7% of savers in their 50s have all of their savings in stock holdings.
