Retirement balances are up, but more workers took hardship withdrawals

“Your 401(k)s are way up,” President Donald Trump said in his State of the Union address — and they are, but new data shows that hardship withdrawals are also on the rise.

“The typical 401(k) balance has increased by at least $30,000 since I took office.” Trump said In the annual speech before Congress last month.

The average 401(k) balance increased by $14,700 to $146,400 through 2025, finishing the year up 11% from the previous year, according to new data released Wednesday. Loyalty InvestmentsThe nation’s largest provider of 401(k) savings plans.

According to Fidelity’s findings, the average individual retirement account balance also increased by $9,561 to $137,095 in 2025; 7% increase compared to the previous year.

Retirement account balance averages rose 13%, driven primarily by market gains, according to a separate report by Vanguard Group.

The average account balance across all plans was $167,970 as of the end of 2025, according to Vanguard’s report, also released Wednesday.

Mike Shamrell, Fidelity’s vice president of thought leadership, said rising balances are further supported by a variety of “non-financial factors,” such as positive savings behaviors.

The average 401(k) contribution rate, including employer and employee contributions, is currently 14.2%, just below Fidelity’s recommended 15% savings rate.

However, another good development in the major indexes also helped: the S&P 500 posted a third consecutive year of strong gains, up 24% in 2023, 23% in 2024 and 16% in 2025. The Nasdaq is up 20% in 2025, while the Dow Jones Industrial Average is up almost 13%.

However, savers also Experts say this indicates underlying financial distress.