The stock market took retirement savers on some wild-mouse roller coaster kind of turns early in 2026. We saw the Dow soar to close above the 50,000 mark for the first time ever on Feb. 6, but then jerk back and unexpectedly drop nearly 11% by late March following the sudden U.S. air strikes and ongoing war in Iran.
Looking at the entire first quarter, though, the blows weren’t nearly as bad.
When it comes to 401(k)s, savers on average saw a drop of 4% in their account balances from the end of 2025 through the end of March, according to the latest data released by Fidelity Investments.
Fidelity released its first-quarter retirement analysis on Thursday, May 28, offering tidbits that could give insight into how you stack up next to everyone else.
Who Wants to Be a 401(k) Millionaire?
The first few months of 2026 were not easy on anyone — even the 401(k) millionaire class.
During the first quarter, Fidelity reported 645,000 savers who can be dubbed 401(k)-created millionaires. That’s down 3% from the fourth quarter of 2025 but up 26% from the first quarter in 2025.
The number of IRA-created millionaires fell 2% to 571,622 savers in the first quarter from the fourth quarter last year but up 32% from the same quarter a year ago.
To achieve this level, Fidelity noted, these savers typically make regular contributions to the same account with the same employer for many years.
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, according to Fidelity.
Many Turning to 401(k) Cash to Get Out of a Jam
Not everyone is able to consistently save without turning to their 401(k) plans for college bills, emergencies or other major expenses.
In the first quarter of 2024, Fidelity noted that 17.8% of workers had an outstanding 401(k) loan. Just two years later, some 19.2% of participants had outstanding loans.
In the first quarter, 2.4% of participants initiated a new loan from their 401(k). That’s up from 2.3% from the same time a year ago.
The average amount of each new loan taken is $8,420. Among participants who’ve taken at least one loan, according to Fidelity, the outstanding loan amount is $10,550.
Kirsten Hunter Peterson, vice president of workplace thought leadership at Fidelity, said many times some employees do not have sufficient emergency savings to cover unexpected costs, so they take money from their retirement plans, such as a plan loan that can be repaid.
A loan, according to Fidelity, allows you to borrow money from your retirement savings and pay it back over time, often within five years, with interest. The loan payments and interest go back into your account. A loan is one way to avoid penalties and taxes associated with an early withdrawal.
What some people don’t realize, though, is that a 401(k) loan must be paid back if someone loses their job or takes a job at another company. The rules vary by 401(k) plans, but the payback time might be 30 days to 90 days. If you do not repay the loan, you will owe both taxes and a 10% penalty on the outstanding balance if you’re under age 59½.
The IRS offers some exceptions for hardship withdrawals to avoid the 10% penalty on withdrawals before age 59½. You would still generally owe ordinary income taxes on the withdrawal. The IRS notes that buying a boat or a TV is not considered an immediate and heavy financial need — no break for a hardship withdrawal there.
But you could qualify for a hardship withdrawal for some situations, such as funeral expenses; medical care expenses for the employee, the employee’s spouse, dependents or beneficiary; costs directly related to the purchase of an employee’s principal residence; and money needed to prevent the eviction of the employee from the employee’s principal residence or foreclosure on the mortgage on that residence.
One rule: The employee couldn’t reasonably obtain the money from another source.
Some Started Saving More in 2026
Hunter Peterson said it was encouraging to see total savings rates go up slightly in the first quarter during a time of more uncertainty.
“Despite a lot of the economic challenges that folks might be facing, they’re continuing to prioritize their future selves and their retirement,” Hunter Peterson told the Detroit Free Press, part of the USA TODAY Network.
During the first quarter, according to Fidelity, nearly one in five — or 18% — of participants increased their retirement savings rate.
Many people didn’t decide to direct more money to retirement; instead they work at companies that have a feature in the 401(k) plan that automatically increases the percentage of pay that an individual employee saves each year. Some people also decided to save more on their own.
The total savings rate — including both employer and employee contributions — for 401(k) savers reached 14.4%. That is close to Fidelity’s suggested combined savings rate of 15%.
The average quarterly employer contribution amount reached a record level of $2,080 in the first quarter, up from the previous high of $2,020 a year ago.
Early this year, the average retirement account balance in a Fidelity 401(k) hit $141,000 in the first quarter, down 4% from the fourth quarter of 2025.
But average 401(k) balances still ended up 11% higher from the first quarter of 2025 and up 14% in the past five years from the first quarter of 2021. If you go back 10 years, balances are up 61% from the first quarter of 2016.
How Anyone Feels About Their 401(k) Can Vary a Great Deal
Honestly, savers would rather spot an average 4% decline on a first-quarter statement than a decline of 8% or 10%.
Many younger workers who have years to go until retirement age tend to be more aggressively invested in stocks and might have taken a larger hit during the volatility in March. Yet many people closer to retirement age tend to have more of a mix of stocks, bonds and money market funds.
The Dow Jones Industrial Average fell by nearly 3.6% in the first quarter after closing at 48,063.29 points on Dec. 31, 2025.
And, fortunately, many 401(k) savers saw a bit of relief in May as the Dow Jones Industrial Average once again closed above the 50,000 mark on a few days, including May 22 and May 26.
Retirement savings balances, of course, reflect the dollars that continue to be saved by individual workers, employer contributions, how you choose to invest money in your plan, market gains or losses and, yes, portfolio diversification.
Fidelity’s Hunter Peterson said many 401(k) savings plans are well-diversified with a mix of stocks and bonds, which offer a way to hedge against highly volatile times for the stock market.
Target date funds, a popular option for many savers, provide a collection of ready-mixed investments that are selected based on the year you’d expect to retire. The mix of stocks and bonds is automatically readjusted based on the year that’s closest to your expected date of retirement. The mix trends more toward bonds than stocks as you age.
Roth 401(k) Gains Ground With Younger Workers
Another trend in the Fidelity data seems to reflect some financially savvy moves — and confidence — by younger adults.
As of the first quarter, more than one in five Gen Z workers — or 21.4% — contributed to a Roth 401(k). Gen Z represents the youngest members of the typical workforce, including those who are 29 and younger in 2026.
More than 95% of retirement plans offered by employers through Fidelity now offer a Roth option, Hunter Peterson said. And many Gen Z workers are taking advantage of it.
Typically, withdrawals from a Roth 401(k) are tax-free in retirement if various rules are met. The Roth 401(k) account, for example, must be established for at least five years, and generally, you’d need to be over the age of 59½ for tax-free and penalty-free withdrawals.
As you’re working, you don’t get an upfront tax break on contributions made into a Roth 401(k) each year, as you would with a traditional 401(k). The traditional 401(k) has tax-deductible contributions but comes with taxable withdrawals.
Hunter Peterson noted that many Gen Z employees may be making less money and face lower federal income tax rates early in their careers, making an upfront tax break with a traditional 401(k) somewhat less attractive than for someone in a higher tax bracket.
“They’re capitalizing on that Roth feature at this point in their lives,” she said.
High earners can take advantage of a Roth 401(k), too. Fidelity notes that high earners are not restricted from contributing to Roth 401(k)s, which is different from the rules involving Roth IRAs.
For 2026, you can make a full contribution to a Roth IRA if your modified adjusted gross income is less than $153,000 for a single person and $242,000 if married and filing jointly.
IRA contributions reached record highs in the first quarter, Fidelity noted, driven by strong demand for contributions to tax-beneficial Roth IRAs.
In the first quarter, some 67% of contributions into IRA accounts involved money going to Roth accounts. Roth conversion transactions increased 41% year-over-year, highlighting the continued acceleration of Roth adoption.
Women Committing to Save for Retirement
Earlier this year, Fidelity noted that women made strong commitments to retirement savings over the past several years.
The average 401(k) balance among women grew 22% over the past five years, compared with 20% among savers overall. Women who have been in their 401(k) for 15 years continuously had an average balance of $508,700 at the end of 2025, up from $453,500 in 2024.
Nearly four in 10 women increased their 401(k) savings rate in 2025. And even more startling, 47% of Gen Z women boosted their savings rate. Again, plans that make automatic shifts in contributions enabled many to accumulate more savings in these plans.
More Talk About Stocks
In its latest report, Fidelity also highlighted data from its 2026 Stock Plan Participant Research, which focuses on equity compensation as an employee benefit. This involves different types of benefits, from stock options to employee stock purchase plans, where employees can buy their company’s stock at a discounted price.
Hunter Peterson said research has shown that giving employees ownership in a company, even smaller start-ups, can increase motivation and engagement.
Fidelity’s latest data shows that many employees view equity compensation as a gateway to investing, a source of financial security and a reason to stay with their employer.
Fidelity said 43% of participants say they became first-time investors through their company’s stock plan. And 56% of employees say equity compensation is a benefit that makes them more likely to stay with their employer, while 65% cite it as an important consideration in accepting a job.
“It’s certainly a trend,” Hunter Peterson said, “where we’re seeing more companies consider this as a benefit because of the great outcomes they’re experiencing on their end.”
Contact personal finance columnist Susan Tompor: [email protected]. Follow her on X @tompor.
Reporting by Susan Tompor, USA TODAY NETWORK / Detroit Free Press. USA TODAY Network via Reuters Connect.
-1024x768.jpg "Red Snapper Used as Cudgel by Fed Judge")
