Key facts
- Americans' 401(k) balances and contributions hit record highs in 2025.
- Median account balances increased by 27% to $44,115.
- The average account balance reached $167,970.
- 94% of active savers saw their balances grow due to market returns and contributions.
- Automatic enrollment is a key factor in increased participation, with 61% of plans using it in 2025.
- Hardship withdrawals rose to 6% in 2025.
Americans' 401(k) savings accounts saw record highs in 2025, according to Vanguard's 'How America Saves 2026' report. Median account balances increased by 27% to $44,115, and the average balance rose to $167,970, up nearly $20,000 from the previous year. This growth was driven by strong market returns and increased employee contributions.
A significant factor contributing to higher participation rates is the shift towards automatic employee enrollment, with 61% of Vanguard plans utilizing this feature in 2025, compared to just 10% in 2006. This 'autopilot' approach encourages saving by automatically enrolling employees, increasing their deferral rates annually, and investing contributions in balanced strategies.
While overall balances grew, hardship withdrawals increased for the fourth consecutive year, reaching 6% in 2025. The report cited potential inflation pressures and economic challenges, alongside a streamlining of the hardship withdrawal process, as reasons for this trend.