More US workers are raiding their 401(k)s as average balances fall
Average 401(k) retirement balances sank at the start of 2026 amid market swings, while a rising share of US savers tapped their accounts for cash, Fidelity told CNBC. The data point to continued household financial pressure, against a backdrop of high interest rates and inflation that has outpaced post-pandemic paychecks.
Data Fidelity shared with CNBC show average 401(k) balances declined in the first quarter of 2026 as markets swung. Over the same period, the share of workers tapping their accounts early for cash rose; Fidelity said the trend overlapped with Iran-war-driven food and energy pressures, elevated mortgage rates and wage growth lagging post-pandemic inflation.
Fidelity's researchers said a small share of early withdrawals qualified as penalty-free 'hardship' exceptions, while most remained subject to taxes and penalties. Industry analysts say early withdrawals erode compounding in retirement savings and can require roughly an additional decade of service per worker to offset.
Federal Reserve officials have reiterated that fighting inflation remains the priority; economists say household balance-sheet pressure could become more visible if the labour market continues to soften. This report is not personal financial-planning or investment advice; readers considering retirement-account decisions should consult a licensed adviser.
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