In his State of the Union address, President Donald Trump said "your 401(k)s are way up" — and they are, but hardship withdrawals are also up, new data shows.
"Since I took office, the typical 401(k) balance is up by at least $30,000," Trump said in the annual speech before Congress last month.
The average 401(k) balance rose by $14,700 to $146,400 over the course of 2025, ending the year up 11% from a year earlier, according to new data released Wednesday from Fidelity Investments, the nation's largest provider of 401(k) savings plans.
The average individual retirement account balance also gained $9,561 to $137,095 in 2025, Fidelity found — a 7% increase year over year.
Retirement account balance averages increased by 13%, driven primarily by market gains, a separate report by Vanguard Group found.
Across all plans, the average account balance was $167,970 as of the end of 2025, according to Vanguard's report, also released Wednesday.
Rising balances were further buoyed by several "nonfinancial factors," such as positive savings behaviors, said Mike Shamrell, Fidelity's vice president of thought leadership
The average 401(k) contribution rate, including employer and employee contributions, now stands at 14.2%, just below Fidelity's suggested savings rate of 15%.
However, another good stretch for the major indexes did help: The S&P 500 notched its third consecutive year of solid gains, rallying 24% in 2023, 23% in 2024 and 16% in 2025. The Nasdaq jumped 20% in 2025, while the Dow Jones Industrial Average rose nearly 13%.
401(k) hardship withdrawals rise
Still, savers also tapped their accounts to free up cash, which experts say indicates underlying financial strain.
The share of workers with an outstanding loan in 2025 was 19.4%, up slightly from 18.9% in 2024, according to Fidelity. About 9% of workers took out a new loan from their 401(k) last year, including for hardship reasons. That's down from 9.5% in 2024.
The share of workers taking a hardship withdrawal, which is broken out separately, rose to 2.7% last year from 2.5% in 2024.
Vanguard's report also showed an uptick in hardship withdrawals. Roughly 6% of workers took a hardship withdrawal in 2025, a record high.
Most financial experts advise against raiding a 401(k) since you'll be forfeiting the power of compound interest. So-called "leakage" from 401(k) plans — especially cash-outs — can jeopardize long-term retirement security.
"We would love to see these numbers trend down," Shamrell said. "The good news is we are continuing to see people stay focused, stay on track" this year, he said, even amid recent market volatility stemming from the U.S.-Iran war.