Vanguard's 2026 report reveals the average 401(k) balance among nearly 5 million accounts reached a record $167,970 at the end of 2025, marking a 13% increase from the previous year. However, the median balance stands at $44,115, highlighting a significant disparity in retirement savings across American workers, according to fortune.com.
The report underscores the growing divide in retirement preparedness, with the average boosted by a small group of high-balance savers while the median worker's savings remain far lower. Applying a standard 4% withdrawal rate to the median balance yields only $1,765 annually, or $147 monthly, insufficient to cover basic expenses like rent or medication. Additionally, 6% of Vanguard participants made hardship withdrawals in 2025, up from 5% in 2024 and triple the pre-pandemic levels.
This disparity reflects broader economic inequality, as the median balance is squeezed despite overall gains. The increase in hardship withdrawals signals financial stress among many savers, contrasting with the record-high average balance driven by strong stock market performance. Vanguard's data provides a comprehensive snapshot of the challenges facing American workers in securing adequate retirement funds.
The 2026 Vanguard report, based on data from nearly 5 million 401(k) accounts, highlights the stark contrast in retirement savings, with the average balance at $167,970 and the median at $44,115 as of year-end 2025.