President Donald Trump has often talked up the stock market\u2019s rise during his second term, saying increases in 401(k) retirement plan balances have made Americans wealthier.<\/p>\n
During a\u00a0June 23 speech<\/a>\u00a0at a Mack truck plant in Macungie, Pennsylvania, Trump said, “The typical 401(k), as you know, is up almost $30,000 in \u2026 13 months.”<\/p>\n He\u2019s made\u00a0similar points<\/a>\u00a0going back to his Feb. 24\u00a0State of the Union address<\/a>.<\/p>\n The stock market has risen during Trump\u2019s second term. But the average $30,000 gain he cited is not supported by data; that\u2019s about triple the increase found in a large analysis of 401(k) balances. And a growing share of Americans are withdrawing 401(k) dollars before retirement to cope with unexpected hardships.\u00a0<\/p>\n The White House offered no supporting evidence for Trump\u2019s statement. White House spokesperson Kush Desai said “equity markets have hit multiple all-time highs” during Trump\u2019s second presidency.<\/p>\n \t\t\t\t\t\t\tHow much has the stock market increased during Trump\u2019s second term?<\/p>\n The\u00a0Standard & Poor\u2019s 500<\/a>, a metric that charts a broad selection of publicly traded stocks, shows notable gains since Trump took office on Jan. 20, 2025.<\/p>\n Between his second inauguration and the day of his February 2026 State of the Union address \u2014 the first time he mentioned the $30,000 figure \u2014 the S&P rose by about 13%. From his second inauguration to June 23, the day of his Pennsylvania speech, the S&P rose by about 24%.<\/p>\n \t\t\t\t\t\t\t401(k) balances are rising, but not as high as Trump said<\/p>\n What about the gains for typical 401(k) holders?\u00a0<\/p>\n First, narrowing down a “typical” 401(k) account is challenging. People of different incomes, ages and company 401(k) policies can see their balances vary widely \u2014 and that\u2019s before factoring in the mix of assets that make up their accounts.\u00a0<\/p>\n “The (higher account balance) you have, the more gains you will have achieved,” said Joe Fitter, a senior lecturer in finance at Indiana University\u2019s Kelley School of Business.<\/p>\n Fidelity Investments, a financial institution that operates many 401(k) plans, provides the best available data.<\/p>\n Every quarter, Fidelity examines balances within more than 26,000 corporate 401(k) plans serving roughly 25 million participants. It also breaks down the average balance by the account holder\u2019s age.<\/p>\n We looked at Fidelity\u2019s data for the quarterly period ending\u00a0Dec. 31, 2024<\/a>, and for the period ending\u00a0March 31, 2026<\/a>. Comparing these two figures offers a measure of the growth in 401(k) balances during the first 15 months of Trump\u2019s second term \u2014 a good approximation of how much growth occurred during the period he\u2019s been making this claim.<\/p>\n Fidelity offered breakdowns for 11 age ranges, starting at age 20 and ending at 70 and older. Averaging the gains for these 11 ranges produced an increase of $9,454 \u2014 about one-third of the $30,000 figure Trump cited.<\/p>\n The single biggest average increase for any particular age range was 55 to 59, which saw a rise of about $16,000.\u00a0<\/p>\n Experts said the average gains might be lower than $9,454.<\/p>\n “Averages in data like this tend to get pulled up by high-balance accounts, so the median would likely be lower than the $9,000 figure,” said Mark A. Johnson, an investments and portfolio management fellow at Wake Forest University\u2019s business school.<\/p>\n A $30,000 gain during this period would likely have required a balance of at least $200,000 in a 401(k), said Mark Williams, a lecturer in finance at Boston University\u2019s Questrom School of Business. But that\u2019s not a typical amount; about\u00a010% to 20%<\/a>\u00a0of U.S. adults have an account that big.<\/p>\n In addition, the balance increase doesn\u2019t stem only from stock market gains. Some of the increase comes from the account holder\u2019s own contributions and potentially those of their employer.<\/p>\n \t\t\t\t\t\t\tWhy 401(k) balances may not be rising as fast as the overall stock market<\/p>\n The percentage increases by age in Fidelity\u2019s 401(k) data do not necessarily match the overall growth rate of the stock market. From December 31, 2024, through March 31, 2026, the S&P 500 rose by about 11%, but the average 401(k) Fidelity measured rose by about 6.5%, and several age ranges, especially among the youngest and oldest groups, saw smaller increases.<\/p>\n One reason for the lag is that 401(k) accounts typically contain a mix of investment categories. Williams said the typical 401(k) mix is 60% to 65% stocks, with the remainder in other assets, such as bonds, that are less volatile. During the time period in question, bond returns were flat, he said, and that would hold down overall 401(k) returns.<\/p>\n Another important reason is that 401(k) accounts are a two-way street: Account owners can take out money, though they may have to pay a penalty to do so.<\/p>\n In general, 401(k) accounts are designed to provide retirement income, so early withdrawals \u2014 money taken out before age 59 1\/2 \u2014\u00a0may incur<\/a>\u00a0a 10% early withdrawal penalty, plus income taxes.\u00a0<\/p>\n However, certain circumstances may allow an early withdrawal without incurring a penalty, including birth or adoption costs, a new disability, disaster recovery, medical or other emergencies, funeral expenses and payments to avoid an eviction or foreclosure.<\/p>\n