Trump says ‘401(k)s are way up’ — but workers are tapping them at record rates
#401(k) #retirement accounts #hardship withdrawals #State of the Union #financial stress #market gains #compound interest #retirement security
📌 Key Takeaways
- 401(k) balances increased significantly during Trump's presidency
- Hardship withdrawals reached record highs in 2025
- Market gains substantially contributed to balance growth
- Financial experts warn against tapping retirement accounts due to compound interest loss
📖 Full Retelling
President Donald Trump highlighted rising 401(k) balances during his recent State of the Union address before Congress, claiming retirement accounts have grown substantially during his presidency, while new data reveals a troubling increase in hardship withdrawals suggesting underlying financial pressures despite market gains. Trump specifically stated that 'since I took office, the typical 401 balance is up by at least $30,000,' and according to Fidelity Investments, the nation's largest provider of 401 savings plans, the average 401 balance indeed rose by $14,700 to $146,400 in 2025, marking an 11% increase from the previous year. The average individual retirement account balance also gained $9,561 to reach $137,095, a 7% year-over-year increase, with similar findings reported by Vanguard Group which showed average account balances across all plans reached $167,970 by the end of 2025. These balance increases were primarily driven by strong market performance, including the S&P 500 gaining 16% in 2025 after 24% and 23% gains in the previous two years, while the Nasdaq jumped 20% and the Dow rose nearly 13%. However, the positive headlines mask concerning trends as financial hardship led a record 6% of workers to take hardship withdrawals from their retirement accounts in 2025, while 19.4% of workers carried outstanding loans, slightly up from 18.9% in 2024, indicating that many Americans are struggling financially despite the apparent growth in their retirement savings.
🏷️ Themes
Retirement savings, Economic trends, Financial hardship
📚 Related People & Topics
State of the Union
Annual report by the president of the United States
The State of the Union address (sometimes abbreviated to SOTU) is an annual message delivered by the president of the United States to a joint session of the United States Congress near the beginning of most calendar years on the current condition of the nation. The speech generally includes reports...
Entity Intersection Graph
Connections for State of the Union:
👤
Donald Trump
37 shared
🌐
Immigration
5 shared
🌐
Democrat
5 shared
👤
Abigail Spanberger
5 shared
🌐
Immigration law
4 shared
Mentioned Entities
Original Source
In his State of the Union address , President Donald Trump said "your 401 s are way up" — and they are, but hardship withdrawals are also up, new data shows. "Since I took office, the typical 401 balance is up by at least $30,000," Trump said in the annual speech before Congress last month. The average 401 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 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. Read more CNBC personal finance coverage Trump says '401 s are way up' — but workers are tapping them at record rates AI, layoffs spur workers to want a career change, survey finds — but few may do it Poor coordination can cost couples an average $14,000 in retirement wealth Gold price jumps on Middle East turmoil. What to know before investing What student loan borrowers need to know about judge's ruling on SAVE plan As Iran strikes disrupt flights, why travel insurance may fall short How the U.S.-Iran war could impact gas prices at the pump More low- and middle-income Americans are investing, report finds. Here's why Average IRS tax refund is up 10.2%, based on early filing data IRS: Nearly 1 in 5 eligible filers miss a 'valuable' credit worth thousands Block cuts about half its workforce: How to move forward after a mass layoff Trump said tariffs may 'substantially replace' income taxes. What policy experts say Some student loan borrowers are getting Navient settlement checks — who qualifies Trump accounts aren't exactly 'tax-free,' as the president said. How they work Trump said beef, egg and chicken prices are falling. Here's what the data shows CNBC's Financial Advisor 100: Best financial advisors, top firms ranked Retirement account balance averages increased by 13%, driven primarily by market gains, ...
Read full article at source