President Trump signs TrumpIRA order expanding access to retirement savings
President Trump signed an executive order creating TrumpIRA.gov, which can be used by workers whose employers do not offer a 401(k) plan to enroll in a retirement plan.
- During the first quarter, Fidelity reported 645,000 401(k) millionaire savers.
- This was a decrease of 3% compared to the fourth quarter of 2025, but an increase of 26% compared to the first quarter of 2025.
At the beginning of 2026, the stock market was on a roller coaster ride for retirement savings. On February 6, the Dow Jones Industrial Average closed above the $50,000 mark for the first time in history, but then rebounded sharply, unexpectedly falling nearly 11% by late March in the wake of sudden U.S. airstrikes and the ongoing war in Iran.
But if you look at the first quarter as a whole, the blow wasn’t that bad.
When it comes to 401(k)s, savers’ account balances declined by an average of 4% from the end of 2025 to the end of March, according to the latest data released by Fidelity Investments.
Fidelity released its first quarter retirement analysis on Thursday, May 28, providing information that can give you insight into how it stacks up compared to other companies.
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The first few months of 2026 haven’t been easy for anyone, even those in the 401(k) millionaire class.
During the first quarter, Fidelity reported 645,000 401(k) millionaire savers. This was a decrease of 3% compared to the fourth quarter of 2025, but an increase of 26% compared to the first quarter of 2025.
The number of millionaires created by IRAs in the first quarter was 571,622 savers, down 2% from the fourth quarter of last year but up 32% from the same period last year.
To achieve this level, these savers typically make regular contributions to the same account with the same employer over many years, Fidelity noted.
According to Fidelity, the average age of 401(k) millionaires is nearly 59 years old and they invest in the same account for an average of 25 years.
Many people turn to 401(k) cash to get out of trouble.
Not everyone can consistently save for college tuition, emergencies, and other major expenses without relying on a 401(k) plan.
Fidelity noted that in the first quarter of 2024, 17.8% of its employees had a 401(k) loan balance. However, after just two years, approximately 19.2% of participants had outstanding loans.
In the first quarter, 2.4% of participants initiated new loans from their 401(k)s. This was up from 2.3% during the same period last year.
The average new loan amount is $8,420. Fidelity said participants who received at least one loan had a loan balance of $10,550.
Kirsten Hunter Peterson, Fidelity’s vice president of workplace thought leadership, has repeatedly said that some employees don’t have enough emergency savings to cover unexpected expenses and instead take funds from retirement plans, such as repayable plan loans.
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According to Fidelity, a loan allows you to borrow money from your retirement savings and pay it back with interest over a long period of time (often within five years). Loan payments and interest will be credited back to your account. Loans are one way to avoid penalties and taxes associated with early withdrawals.
But what some people don’t realize is that if someone loses their job or takes a job with another company, they will have to repay their 401(k) loan. Rules vary by 401(k) plan, but payback periods can range from 30 to 90 days. In this case, if you don’t repay the loan, you’ll pay both taxes and, if you’re under age 59 1/2, a 10% penalty on the loan balance.
The IRS has several exceptions for hardship withdrawals to avoid the 10% penalty on withdrawals made before age 59 1/2. You typically also have to pay ordinary income taxes on your withdrawals. The IRS notes that purchasing a boat or television is not considered a major immediate financial need. There, no difficult withdrawal awaits.
However, depending on the circumstances, such as funeral expenses, you may be eligible for withdrawal of hardship benefits. Medical expenses for the employee, the employee’s spouse, dependents, or beneficiaries. Expenses directly related to the purchase of an employee’s primary residence and funds needed to prevent eviction from the employee’s primary residence or foreclosure on the mortgage on that residence.
One of the rules is that the employee could not reasonably obtain the funds from another source.
Some people started saving more in 2026
Hunter Peterson said it was encouraging to see the gross savings rate rise slightly in the first quarter amid heightened uncertainty.
“Even though people are facing many economic challenges, they continue to prioritize their future selves and their retirement,” Hunter Peterson told the Detroit Free Press, part of the USA TODAY Network.
Nearly one in five participants, or 18%, increased their retirement savings rate in the first quarter, according to Fidelity.
Many people didn’t decide to put more money toward retirement. Instead, they work for companies that feature 401(k) plans that automatically increase the percentage of their paychecks that individual employees save each year. Some people decide to save more on their own.
The total savings rate for 401(k) savers (including both employer and employee contributions) reached 14.4%. This is close to the 15% overall savings rate suggested by Fidelity.
Average quarterly employer contributions reached a record level of $2,080 in the first quarter, surpassing the high of $2,020 a year ago.
Earlier this year, the average Fidelity 401(k) retirement account balance reached $141,000 in the first quarter, down 4% from the fourth quarter of 2025.
However, the average 401(k) balance still increased by 11% from the first quarter of 2025 and by 14% over the past five years from the first quarter of 2021. Going back 10 years, balances are up 61% from the first quarter of 2016.
How people feel about their 401(k)s varies greatly.
Let’s be honest, savers would rather point to an average 4% decline in Q1 results than an 8% or 10% decline.
Younger workers, many of whom are years away from retirement, tend to be more active in stocks and may have been hit harder during the March volatility. However, many people nearing retirement age tend to hold a larger mix of stocks, bonds, and money market funds.
The Dow Jones Industrial Average fell nearly 3.6% in the first quarter after closing at 48,063.29 points on December 31, 2025.
And fortunately, many 401(k) savers felt a little relieved in May, as the Dow Jones Industrial Average once again closed above $50,000 for several days, including May 22 and May 26.
Of course, retirement savings balances reflect the dollars an individual worker continues to save, employer contributions, plan investment choices, market gains and losses, and portfolio diversification.
Fidelity’s Hunter Peterson said many 401(k) savings plans are well-diversified with a mix of stocks and bonds, providing a hedge against periods of extreme volatility in the stock market.
Target-date funds, popular with many savers, offer a collection of ready-made mixed investments that are selected based on the year you plan to retire. Your stock and bond mix will automatically rebalance based on the year closest to your planned retirement date. As you get older, you tend to invest more in bonds than stocks.
Roth 401(k) gains traction among young workers
Another trend in the Fidelity data appears to reflect financially smart moves and confidence by young adults.
As of Q1, more than 1 in 5 Gen Zers (21.4%) contributed to a Roth 401(k). Generation Z represents the youngest members of the general workforce, including those who are 29 years old or younger as of 2026.
More than 95% of employer-sponsored retirement plans through Fidelity now offer Roth options, Hunter Peterson said. And many Gen Z workers are taking advantage of it.
Withdrawals from a Roth 401(k) are generally tax-free in retirement if various rules are met. For example, a Roth 401(k) account must be open for at least five years and typically requires you to be age 59 1/2 or older to make tax-free and penalty-free withdrawals.
If you’re working, you don’t get any upfront tax benefits on contributions made to a Roth 401(k) each year, unlike a traditional 401(k). A traditional 401(k) has tax-deductible contributions but requires taxable withdrawals.
Hunter Peterson noted that many Gen Z employees earn less and may face lower federal income tax rates early in their careers, making the upfront tax savings of a traditional 401(k) a little less attractive than for employees in higher tax brackets.
“They’re tapping into Ross characteristics at this point in their lives,” she says.
Roth 401(k)s are also available to high-income earners.
Fidelity notes that there are no restrictions on Roth 401(k) contributions for high earners, which is different from the rules for Roth IRAs.
In 2026, you can fully contribute to a Roth IRA if your modified adjusted gross income is less than $153,000 if you’re single or $242,000 if you’re married filing jointly.
Fidelity noted that demand for contributions to tax-advantaged Roth IRAs is strong, with IRA contributions reaching a record high in the first quarter.
In the first quarter, about 67% of contributions to IRA accounts included funds in Roth accounts. Roth conversion transactions increased 41% year-over-year, highlighting the continued acceleration of Roth adoption.
A woman working on saving for retirement
Earlier this year, Fidelity noted that women have made a stronger commitment to saving for retirement over the past few years.
Over the past five years, the average 401(k) balance for women has increased by 22%, compared to 20% for savers overall. The average balance for women who have been in a 401(k) for 15 years was $508,700 at the end of 2025, up from $453,500 in 2024.
In 2025, nearly 4 in 10 women increased their 401(k) savings rate. And even more impressively, 47% of Gen Z women increased their savings rate. Again, plans that automatically change contributions have allowed many people to accumulate more savings in these plans.
Let’s talk more about stocks
In its latest report, Fidelity also highlighted data from its 2026 Stock Plan Participant Survey, which focuses on stock compensation as an employee benefit. This includes many different types of benefits, from stock options that allow employees to buy company stock at a discount to employee stock purchase plans.
Hunter Peterson said research shows that giving employees ownership of the company, even in small startups, increases motivation and engagement.
New data from Fidelity shows that many employees view stock compensation as a gateway to investing, a source of financial security and a reason to stay with their employer.
According to Fidelity, 43% of participants said they became first-time investors through their company’s equity plan.
Additionally, 56% of employees say stock compensation is a benefit that increases their chances of staying with their employer, and 65% cite it as an important consideration when accepting a job.
“This is certainly a trend,” Hunter Peterson said. “More and more companies are seeing this as an advantage because they’re doing great things for themselves.”
Contact personal finance columnist Susan Tompol: stompor@freepress.com. follow himr X @tompor.
