401(k) balances hit record while median saver lags far behind
Vanguard data show retirement accounts rose in 2025, but the median balance remained far below what many Americans say they need.
By Sofia Marchetti · World Affairs Correspondent
3 min read
Retirement balances in Vanguard-administered plans reached a new high at the end of 2025, according to the firm’s How America Saves 2026 report. The same data show a wide gap between the average account and the balance held by the saver in the middle of the pack, underscoring how uneven retirement readiness remains.
Vanguard reported an average 401(k) balance of $167,970 across nearly 5 million accounts it administered at year-end 2025. The firm said that figure rose 13% from the prior year and marked a record for its dataset.
The median balance was much lower: $44,115, according to Vanguard. At a 4% annual withdrawal rate, that account would generate about $1,765 a year, or roughly $147 a month.
The difference between the average and median reflects how larger accounts can pull the average higher while many savers hold far less, according to the Vanguard figures. The report covers defined contribution plan participants in Vanguard-administered plans, not every U.S. worker.
Hardship withdrawals also rose
Vanguard’s data also show more workers tapping retirement savings early. Fortune reported that 6% of Vanguard participants took a hardship withdrawal in 2025, up from 5% in 2024.
Fortune reported that the hardship-withdrawal rate was triple its pre-pandemic level and had increased for six straight years. The median hardship withdrawal was $1,900, according to the report.
Those withdrawals point to pressure on household finances even as account balances benefited from market gains. Vanguard’s report does not say that rising balances alone mean workers are on track for retirement.
Targets remain far higher
Other retirement benchmarks show how far the median account falls short. Northwestern Mutual found this year that Americans believe they need $1.46 million to retire comfortably, according to CNBC’s report on the survey.
Fidelity’s guidance says workers should have 10 times their salary saved by age 67, according to materials cited by Fortune. For someone earning $60,000 a year, that benchmark would be $600,000.
Vanguard recommends saving 12% to 15% of annual pay for retirement, including any employer contribution. The firm’s guidance puts the burden on both worker savings and employer plan design.
Plan design shapes savings
Fortune reported that Vanguard’s long-running data point to plan features such as automatic enrollment, automatic contribution increases and professionally managed default funds as major drivers of retirement outcomes. The Investment Company Institute said in a June 2026 survey that nearly half of Americans with a 401(k) said they probably would not save for retirement without one.
That finding matters for workers whose employers do not offer a plan, or whose plans lack automatic features. Fortune reported that those workers can miss the systems that push participants to start saving and remain invested.
Teresa Ghilarducci, a New School economist who studies retirement policy, told Fortune earlier this year that low-income workers who have been left out of retirement plans often distrust the system. Many low-income earners, she said, “want to know what the catch is.”
Vanguard’s How America Saves 2026 report is based on nearly 5 million defined contribution plan participants in plans the firm administered as of the end of 2025. The figures show stronger account balances at the top line, alongside persistent shortfalls for the typical participant.
This story draws on original reporting from Fortune.