Retirement Balances Hit a Record in 2025—But More Workers Tapped Their 401(k)s Early

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The typical retirement account balance grew 16% in 2025, according to Vanguard, with a strong stock market driving much of the gains.1

Workers participating in employer-sponsored retirement plans had a median balance of about $44,000 in 2025, up from $38,000 in 2024, Vanguard said in its annual "How America Saves" report out Tuesday. The research covers 4.6 million people in Vanguard-managed defined contribution plans, such as 401(k)s, managed by the company.

The average balance hit almost $168,000, an increase of 13% from 2024, Vanguard said. The average is pulled up by accounts with high balances, while the median marks the midpoint—half of the balances are lower, half higher.

“Even in the last few years here with rising interest rates, rising inflation, consumer debt at an all-time high—we’re still seeing very strong retirement savings behaviors,” said Jeffrey Clark, head of defined contribution research at Vanguard.

Saving for retirement early gives money more time to grow. It gives workers more time to benefit from compound growth and build a cushion to draw on if illness or other setbacks cut a career short.

Stock prices rose about 16% in 2025, the analysis noted. Still, the market swung on the Trump tariffs and other geopolitical news.

Few savers flinched: just 5% of participants who don't use advice traded during the year, and only 1% of those holding a single target-date fund made any move, Vanguard said.

But balances are not always the best way to assess retirement preparedness, Clark said. Many account holders have other 401(k)s or assets, and the data can be skewed by new employees opening accounts with low balances.

Instead, he said workers should focus more on their savings habits, which appear strong despite recent economic challenges.

Vanguard recommends putting 12% to 15% of pay into a retirement account. The median aggregate contribution—what workers and employers collectively contribute—came close to that threshold, at 11.6%. That's on par with the 11.6% median in 2024 and up from 11.5% in 2023, Vanguard said. (Most plans with elective deferrals allow workers to get some support from employers, Vanguard said.)

Worker contributions slipped modestly: they saved a median of 6.6% of pay in 2025, down from 6.7% in 2024 and 6.8% in 2023, the report said. Still, the “elective” deferral rate—which looks at workers’ intent—held steady at 7%, Clark said. Workers often defer less than they intend because they hit the annual contribution limit.

“The elective [rate] is actually important when we look at behavioral aspects,” Clark said. “This is still at an all-time high.”

In 2025, more workers took hardship withdrawals, which are often used when people face a foreclosure, eviction, or other emergency, but can also be used to help buy a home or pay college tuition. About 6% of accountholders took a hardship withdrawal, up from 5% in 2024—a rise Vanguard ties partly to looser rules and easier administration, not just need. The median amount withdrawn was $1,900.

Even so, the typical balance still climbed to a record, a reminder that in 2025 the market, more than the saver, set the pace.