Key facts
- Median 401(k) account balances rose 27% in 2025.
- The average 401(k) balance reached $167,970 in 2025.
- 94% of participants saw an increase in their account balances.
- Hardship withdrawals increased to 6% in 2025.
Americans' 401(k) savings accounts reached record highs in 2025, driven by increased contributions and strong market performance, according to Vanguard's 'How America Saves 2026' report. Median account balances saw a 27% increase year-over-year, with 94% of participants experiencing growth. The average balance climbed to $167,970 from $148,153 in 2024, while the median balance rose to $44,115 from $38,176. A significant factor contributing to higher participation rates is the shift towards automatic employee enrollment, which has become standard in 61% of Vanguard-defined contribution plans, compared to 10% in 2006. This 'autopilot' approach encourages saving by framing participation as the default. While deferral rates remained stable at 7.6% on average and 6.6% median, the proportion of participants deferring over 10% of their income has grown to 25% from 20% a decade prior. However, the report also noted an increase in hardship withdrawals, which rose to 6% in 2025 from 5% the previous year, potentially due to inflation and economic pressures, though a streamlined application process has made assets more accessible during times of need.