Clients May Have More Stashed in 401(k)s Than You Think
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Summary
Average U.S. 401(k) balances reached $167,970 in 2025, a 13% increase from the prior year, while the median balance rose 16% to $44,115, according to Vanguard's annual retirement savings report covering approximately 5 million savers. The average one-year total return for retirement plan investors was 19.3%, and among continuous savers the median balance increased 27%.
Market Impact
The divergence between average and median balances illustrates the highly skewed distribution of retirement savings: the average reflects participants at approximately the 75th percentile, while one in four savers held less than $10,000. The 70% adoption of professionally managed allocations is a structural tailwind for target-date and model portfolio products. This analysis is informational and avoids any directional trading claims.
Why It Matters
It establishes the current baseline of U.S. retirement savings concentration and the structural contribution of managed allocations to aggregate balance growth.
Key Points
- Average 401(k) balance reached $167,970 in 2025, up 13% from prior year; median balance was $44,115, up 16%.
- One in four savers had a balance below $10,000; 35% had balances above $100,000; 18% had balances above $250,000.
- Average one-year total return for plan investors was 19.3%; continuous savers saw median balance growth of 27%, reflecting market returns plus ongoing contributions.
- Nearly 70% of retirement plan investors now use professionally managed allocations such as target-date funds, reflecting a decade-long structural shift from self-directed to advised asset allocation.
Key Entities
Evidence
The average account balance came in at $167,970, which is 13% higher than last year, while the median balance was $44,115, up 16%.Supports: Supports the key balance figures.
One in four savers had an account balance of less than $10,000, while 35% of participants had a balance of more than $100,000. Eighteen percent had a balance of $250,000 or more.Supports: Supports the distribution breakdown.
Nearly 70% of retirement plan investors now use professionally managed allocations, helping them build more diversified portfolios that reflect their time horizons and savings targets.Supports: Supports the managed allocation adoption figure.