If you have access to a 401(k), saving for retirement could be pretty seamless. That's because 401(k)s are funded directly through payroll deductions. In other words, you don't need to actively transfer funds into your 401(k). You can simply tell your employer how much you wish to contribute, and they'll take care of the rest.
If you've been saving steadily in a 401(k), you may be wondering how your balance compares to the average. Vanguard recently released a preview of its annual How America Saves report for 2026. Based on its findings, we have some insight into typical 401(k) balances. The average 401(k) balance may be lower than what you'd expect The stock market had a strong year in 2025.
As a result, Vanguard reports that 401(k) balances last year rose by 13% compared to the end of 2024, reaching an all-time high. In spite of that, the average 401(k) balance as of the end of 2025 was just $167,970. What's perhaps even more telling is that the median 401(k) balance as of the end of 2025 was just $44,115. When you have a median that's much lower than an average, it's usually an indication that a small subset of strong savers is driving the average up.
That median $44,115 may be more indicative of what the typical American actually has saved. Once Vanguard releases its full set of data, we can dig deeper into the numbers and see the average 401(k) balance by age. That should offer a lot more insight, because while a 401(k) balance of $167,970 is great for someone in their 20s or even 30s, it's generally not ideal for someone in their 50s with perhaps just a decade more in the workforce until retirement. How to boost your 401(k) balance If you're not happy with your 401(k) balance, the good news is that there may be things you can do to boost it.
The most important is to make sure you aren't leaving employer matching dollars on the table. From there, get onto a budget that maps out your monthly costs so you can see where your money keeps going. A budget could make it easier to find expenses to cut so you can allocate more money to your 401(k).
Also, make sure you're investing your 401(k) strategically. It's common for 401(k)s to default to target date funds, which can be a convenient way to invest for retirement.
But target date funds sometimes invest too conservatively, which means your returns may be limited. Plus, the fees can be high. So if your 401(k) is sitting in one of these funds, you may want to swap it for a low-cost index fund instead. It's encouraging to see that 401(k) balances rose substantially in 2025.
But much of that rise may be attributable to market gains. If you think your 401(k) needs work, claim your full match, budget carefully, and make sure to choose the right investments to fuel your savings' growth.