This Was the Average 401(k) Balance Last Year, According to a Recent Vanguard Report. Do Your Savings Stack Up?

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If you’re saving in a 401(k) plan on a regular basis, you’ve taken a significant step towards effective retirement preparation. A 401(k) is an incredibly potent tool for accumulating wealth over time, and it can greatly boost your savings efforts.

When considering retirement preparations, each person’s path will vary. Factors influencing your savings objectives may include the local cost of living, the length of your anticipated retirement years, and the type of lifestyle you aspire to have. Your savings strategy might not resemble those of peers your age, and that’s perfectly fine.

Speaking of which, it might prove useful to take a peek at the typical American’s retirement savings. Let me share with you some insights from the latest Vanguard report and an easy strategy for boosting your savings.

The average 401(k) balance by age

Annually, Vanguard publishes the “How America Saves” report, which outlines saving patterns among their 401(k) participants. Although these statistics pertain solely to Vanguard account holders and not the entire population, they can provide a useful insight into the savings habits of many Americans.

In 2025, a report was published using data from the previous year, showing that the typical Vanguard participant’s 401(k) balance was $148,153 on average. However, the middle value, or median, was only $38,176. Since high-income individuals can significantly impact the average, the median is usually a more reliable indicator of an ordinary person’s situation.

Across different age groups, there’s a significant disparity between the typical (average) and middle values (median) when compared to the general average.

Age Range Average 401(k) Balance Median 401(k) Balance
Under 25 $6,899 $1,948
25 to 34 $42,640 $16,255
35 to 44 $103,552 $39,958
45 to 54 $188,643 $67,796
55 to 64 $271,320 $95,642
65 and older $299,442 $95,425

In other words, the amount you save in your 401(k) might not be the same as the average American’s, but this doesn’t automatically imply that your savings plan is deviating from its course. The suitability of your savings goals depends on your unique circumstances.

Instead of just looking at your account balance compared to the norm, it would be prudent to consult with a retirement planning specialist or use a retirement calculator to get an estimated savings target. These resources consider your personal circumstances and provide an approximate savings goal tailored for you.

The simplest way to boost your 401(k) savings

An effective method for increasing your savings in a 401(k) is maximizing the employer match if it’s available through your plan. It’s worth noting that around 86% of Vanguard 401(k) plans include matching contributions, as stated in a report. This could potentially add thousands of dollars to your savings annually with minimal effort required from you.

In the year 2024, I found myself among U.S. workers, and it seemed that the median annual income for us all was roughly $60,000. As an employee, I was pleased to note that my employer was offering a matching program. They would match 100% of my contributions, up to 3% of my salary, which translates to a generous $1,800 per year.

In simple terms, currently, you’re putting in $1,500 annually and receiving a matching contribution. If you were to boost your savings to $1,800 per year and continue to receive the full match, here’s an estimate of how much extra income you might gain with an average annual return of 8% on your investments.

Number of Years Total Savings: Investing $1,500 per Year + $1,500 Company Match Total Savings: Investing $1,800 per Year + $1,800 Company Match
20 $137,000 $165,000
25 $219,000 $263,000
30 $340,000 $408,000
35 $517,000 $620,000
40 $777,000 $933,000

To put it simply, upping your annual contribution by an additional $300, or around $25 per month, could potentially boost your total savings by over $150,000 throughout your career. This company match essentially represents free money, and maximizing it can significantly enhance your retirement fund.

A key strategy for preparing financially for retirement is regularly investing in your 401(k) plan, regardless of how it stacks up against others. Even small contributions can accumulate significantly, especially when coupled with advantages like employer matching. Over the long term, this could add hundreds of thousands of dollars to your savings.

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2025-07-17 01:33