Average 401(k) Balances for 6 Different Age Groups: 2023

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In recent years, retirement plan sponsors have increasingly adopted automatic solutions to help employees save more for retirement, according to research from Vanguard. 

As a result, the fund giant says, plan participation rates have increased, automatic enrollment designs have become stronger and participant portfolio construction has continued to improve with more age-appropriate asset mixes and less extreme equity allocations.

Vanguard’s annual How America Saves study for 2023 comprised approximately 1,700 qualified plans, 1,400 clients and nearly 5 million participants for which Vanguard directly provides recordkeeping services. Nine in 10 of these plans have a 401(k) or 403(b) employee-contributory feature; the rest is an employer-contributory DC plan. Research findings are as of Dec. 31, 2022.

Despite significant uncertainty in 2022 — inflation, rising interest rates and big U.S. equity and bond market declines —Vanguard’s research showed that participants generally remained resilient, their behavior in retirement plans stayed consistent with previous years, and most continued to maintain a long-term view.

The average account balance for Vanguard participants was $112,572, and the median balance was $27,376 — decreases of 20% and 23% from a year earlier. The average one-year participant total return was –15.8%.

Notably, 401(k)s are not Americans’ only pools of retirement savings. According to the Insured Retirement Institute, 42% of households had IRAs as of mid-2022, and those accounts held an average of $104,000 in the fourth quarter of that year, according to Fidelity.

401(k) Savings: Average vs. Median

The Vanguard report noted that the wide divergence between the median and the average balance is due to a small number of very large accounts that significantly raised the average above the median. A third of participants had an account balance of less than $10,000, while another quarter had a balance of more than $100,000. Twelve percent of participants had a balance of $250,000 or more.

Because of the skewed distribution of assets, average balances are at about the 75th percentile, meaning that some three-quarters of all participants had balances below the average, and a quarter had balances above. 

According to the report, average balances are more indicative of the results experienced by longer-tenured, more affluent or older participants. The median balance represents the typical participant: Half of all participants had balances above the median, and half had balances below.

See the gallery for the average and median 401(k) account balances of six age groups, according to Vanguard.

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