There are new 401(k) millionaires minted every year, but some years are better than others. Vanguard creates an annual report to track the progress of the 401(k) plans under its purview, which gives a pulse on the health of retirement savings. This report offers a glimpse into the average 401(k) balance, the strength of the consumer, capital markets, savings trends, retirement plan structure, and plan participation rates.
Despite the economic headwinds within the U.S. over the last several years, such as high inflation, spiking interest rates, increases in mortgage rates, and declines in both the equity and bond markets, investors and employers are still saving for retirement. This is welcome news because retirement savings can boost your net worth and financial independence. If you want to retire early, you can use the 4% rule to calculate how much you can withdraw from your savings.
Due to automatic “opt-in” enrollment mechanisms, employee 401(k) participation rates have increased steadily. As more people participate in 401(k) plans, participants and portfolio managers are getting better at calibrating which asset classes and investments best suit their risk profile and investment time horizon.
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What Is a 401(k) Plan?
If you haven’t signed up for your employer-sponsored 401(k) plan yet, it might be helpful to review what a 401(k) plan provides. A 401(k) plan is a defined contribution plan where you, the employee, contribute income from your paycheck into a retirement account.
From the 401(k) retirement account, you select from a buffet of investment options where to invest your funds. 401(k) plans are popular because you contribute pre-tax income into this account (meaning you don’t get taxed on those earnings), and employers usually offer a matching program. Contribution matching programs are designed to contribute money into your account once you have contributed funds. This can supercharge your retirement savings.
Average 401(k) Balance
If investing in a 401(k) plan sounds like a great idea, it is because they are high-impact retirement saving plans. 401(k) plans are highly recommended by financial advisors and are a fundamental element of financial planning. According to the Vanguard How American Saves 2023 report, the average 401(k) balance in 2023 was $134,128. This balance is up from the 2022 average 401(k) balance of $112,572.[1]
If these numbers seem high to you, remember they don’t necessarily tell the whole story of 401(k) plan health. Plus, everyone’s financial situation is different, and just because you have a low 401(k) balance doesn’t mean you aren’t prepared for retirement. However, it might be useful to see where you stand among your age cohort. Average and median 401(k) balances will give you a quick glimpse into where you stand in your peer group.
Learn the exact 401(k) Contribution Limits for 2025.
Average 401(k) Balance by Income
According to the Vanguard data for 2024 savings, this is the average 401(k) balance by income:
| Income Level | Average 401(k) Balance |
|---|---|
| <$15,000 | $24,175 |
| $15,000–$29,999 | $18,610 |
| $30,000–$49,999 | $25,096 |
| $50,000–$74,999 | $59,273 |
| $75,000–$99,999 | $106,875 |
| $100,000–$149,999 | $178,818 |
| $150,000+ | $336,470 |
401(k) Balances for Ages < 25
This cohort of plan participants has the lowest average and median 401(k) balances because this group is fresh to the workforce and new to investing. Newly out of college or graduate school, this group might be heavily prioritizing other financial goals.
Average: $7,351
Median: $2,816
If you are in this bracket, you might be trying to survive for the first time on your own. Perhaps you are trying to pay off credit cards or student loans. Alternatively, you could be focused on maximizing contributions to a Roth IRA or Traditional IRA before the income phases you out.
401(k) Balances for Ages 25-34
With more time in the workforce, this group has started to tick up their focus on retirement savings. This bracket of participants also has the added benefit of multiple years of contributing to a 401(k) and receiving matching contributions, which can accumulate rapidly.
Average: $37,557
Median: $14,933
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401(k) Balances for Ages 35-44
Retirement saving takes another jump for this cohort of plan participants because they have had more time to save. However, they are facing the challenge of trying to save a down payment for a house, potentially paying for childcare, and saving for the average wedding costs.
Average: $91,281
Median: $35,537
401(k) Balances for Ages 45-54
With the average 401(k) balance soaring above six figures, this group of savers has entered their peak earning years and started to think much more about career planning, retirement planning, and what life looks like after work. Additionally, these savers are contemplating how to pay for college for their children.
Average: $168,646
Median: $60,736
Related: What Is a Target Date Fund?
401(k) Balances for Ages 55-65
Compound interest is a powerful force in investing. This cohort is the beneficiary of having had multiple decades of stock appreciation and matching contributions work their magic. On the cusp of retirement age, if you are over 50 years old, you are permitted to make catch-up contributions ($7,500 extra for 2024).
Average: $244,750
Median: $87,571
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401(k) Balances for Ages > 65
Without much time left in the workforce, this retirement age bucket has reached close to its maximum plan contributions and should consider pivoting its asset allocation to a more conservative approach to reduce the risk of being concentrated too heavily in stocks.
Average: $272,588
Median: $88,488
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Median 401(k) Balance by Age
According to the Vanguard data for 2023 savings, this is the median 401(k) balance by income.
| Participate Age | Median 401(k) Balance |
|---|---|
| <25 | $2,816 |
| 25–34 | $14,933 |
| 35–44 | $35,537 |
| 45–54 | $60,763 |
| 55–64 | $87,571 |
| Over 65 | $88,488 |
Average 401(k) Balance by Age
According to the Vanguard data for 2023 savings, this is the average 401(k) balance by income.
| Participate Age | Average 401(k) Balance |
|---|---|
| <25 | $7,351 |
| 25–34 | $37,557 |
| 35–44 | $91,281 |
| 45–54 | $168,646 |
| 55–64 | $244,750 |
| Over 65 | $272,588 |
What Are Required Minimum Distributions (RMDs)?
Super savers often want to take advantage of compounding interest and let their retirement savings grow exponentially. However, the IRS does set strict standards for when you must start dipping into your 401(k) balances. These required minimum distributions (RMDs) are the minimum amounts you must begin withdrawing from your retirement accounts each year. Generally speaking, you must start taking withdrawals from your 401(k) balance by the time you are 72 years old.
According to the IRS, if you reach age 72 in 2023, your first RMD is due by April 2024, based on your account balance on December 31, 2022, and your second RMD is due by December 31, 2024, based on your account balance by the end of December 31, 2023.[2] The timing of RMDs can get complicated. Consider using a financial advisor to map out your RMDs.
Smart Summary
No matter where you stand on your retirement savings journey, it is vital to analyze your retirement planning progress based on your own situation. You might have had to prioritize paying off credit card debt, repaying student loans, or paying your car note early. Taking a wholesome look at your financial health is crucial for financial planning. There is still time to catch up even if you are below the median or average 401(k) balance. Learn more about the five ways to increase your 401(k) balance quickly.
(1) Vanguard. How America Saves 2024. Last Accessed January 20, 2024.
(2) Internal Revenue Service. Retirement Plan and IRA Required Minimum Distribution FAQs. Last Accessed January 20, 2024.
