Among the numerous retirement planning options available to American workers, contributing to a 401(k) plan is widely recognized for its simplicity and efficacy in securing long-term financial stability. Yet, determining whether one's accumulated savings are adequate can be challenging due to diverse financial goals and lifestyles. It can, however, be illustrative to examine the typical 401(k) savings balance by age to gain insight into prevailing saving patterns.
Each year, Vanguard, a prominent investment management company, compiles and releases data on 401(k) savings to provide an outline of contribution behaviors and balances among its account holders. The 2025 report offers a comparative view of average and median balances within various age brackets, serving as a useful, though not prescriptive, reference for evaluating one’s own savings.
Average and Median 401(k) Balances by Age Group
| Age Group | Average 401(k) Balance | Median 401(k) Balance |
|---|---|---|
| Under 25 | $6,899 | $1,948 |
| 25 to 34 | $42,640 | $16,255 |
| 35 to 44 | $103,552 | $39,958 |
| 45 to 54 | $188,643 | $67,796 |
| 55 to 64 | $271,320 | $95,642 |
| 65 and older | $299,442 | $95,425 |
The data illustrate a marked increase in both average and median balances with advancing age, which reflects ongoing contributions and the compounding growth of investments over time. However, a notable difference exists between the average and median figures. The average is influenced upward by high earners or those with substantial balances, which can skew the perspective on what the typical saver has accumulated. Meanwhile, the median value often gives a more grounded sense of the common experience, revealing that the midpoint balance among savers tends to be significantly lower than the average.
Individuals whose balances fall below the median or average should not necessarily consider this a shortcoming. Retirement needs and goals diverge widely depending on personal circumstances, expected lifestyle, and other income sources. Therefore, these figures function more effectively as contextual benchmarks rather than rigid targets.
Determining Appropriate Retirement Savings
Financial advisors frequently recommend aiming to save enough to replace approximately 80% of pre-retirement income during retirement years. This guideline assumes that retirees typically reduce expenses related to employment, such as commuting and work attire, and that they might also downscale certain lifestyle aspects. For example, an individual earning $100,000 yearly before retirement might target $80,000 per year from savings and other income in retirement.
This general benchmark, however, is not universally applicable. Factors such as geographic cost of living, health care needs, planned leisure activities, and longevity expectations significantly influence the actual savings requirements. Individuals with prospects of longer life spans may need to accumulate additional savings to adequately support extended retirement periods.
Another critical component of retirement planning is taking Social Security benefits into account, as these benefits commonly represent a substantial portion of retirees' income. According to data from December 2025 published by the Social Security Administration, the average monthly benefit for retirees is approximately $2,071. Prospective retirees can review personalized estimates of their future Social Security benefits through online portals, aiding in the calculation of overall retirement income needs.
Given these variables, it is essential for individuals to engage in a personalized assessment of their retirement goals. While understanding where the average American stands in terms of 401(k) savings offers helpful perspective, crafting a retirement plan tailored to one's own financial situation, lifestyle preferences, and expected retirement timeline is paramount for long-term success.