Understanding retirement savings benchmarks can help you gauge whether your retirement planning is on track. Vanguard, one of the largest retirement plan providers in the United States, publishes comprehensive annual data through their “How America Saves” report, offering valuable insights into median retirement savings across different demographics.
The Latest Numbers: 2025 Snapshot
According to Vanguard’s How America Saves 2025 report, which analyzes data from nearly 5 million defined contribution plan participants, the median retirement account balance reached $38,176 by the end of 2024. This represents an 8% increase from the previous year, demonstrating continued growth in retirement savings despite economic uncertainties.
The median figure provides a more realistic picture than the average balance of $148,153, as it represents the middle point where half of all participants have more and half have less. The significant difference between these two numbers highlights the wide disparity in retirement savings across the population.
Breaking Down the Numbers by Age
Vanguard’s data reveals how retirement savings typically accumulate over a working lifetime. Younger workers naturally have lower balances, while those approaching retirement show substantially higher accumulations:
Under 25: The median savings for this group is approximately $2,816, with an average of $7,351. These lower figures reflect factors like entry-level salaries, student loan obligations, and limited time in the workforce.
25-34: Savings begin to accelerate as workers establish their careers and benefit from compound growth over time.
35-44: This group typically sees significant growth as earning potential increases and saving habits become more established.
55-64: Workers in this pre-retirement phase show the highest balances, with some reaching the peak accumulation phase.
65+: The median reaches $88,488 with an average of $272,588, representing the culmination of decades of saving and investment growth.
The Power of Plan Design
One of Vanguard’s most significant findings relates to how plan design affects retirement outcomes. Participants in plans with automatic enrollment save approximately 65% more than those in voluntary enrollment plans. This dramatic difference underscores the importance of removing barriers to retirement saving.
Even more impressive, participants who have been auto-enrolled for 10 or more years show median balances that are 60% higher than those in voluntary enrollment plans. This demonstrates the long-term compounding effect of starting retirement savings from day one of employment.
Current Savings Trends
The 2025 data reveals several encouraging trends in retirement saving behavior:
- Record participation: A remarkable 45% of participants increased their contribution rates in 2024, marking an all-time high since Vanguard began tracking this metric in 2019.
- Professional management adoption: 67% of participants now use professionally managed allocations such as target-date funds or managed accounts, helping ensure age-appropriate investment strategies.
- Automatic features: 61% of plans now offer automatic enrollment, with 78% of larger plans (1,000+ participants) implementing this feature.
Understanding the Broader Context
While median figures provide useful benchmarks, it’s important to understand that retirement readiness extends beyond just 401(k) balances. These numbers don’t account for:
- Individual Retirement Accounts (IRAs)
- Taxable investment accounts
- Social Security benefits
- Pension plans
- Real estate equity
- Other assets
Additionally, the data reflects participants currently in the workforce and may not represent the full picture of retirement preparedness for those who have already retired or left the workforce.
What This Means for Your Retirement Planning
Vanguard recommends saving 12-15% of your income annually for retirement, including any employer contributions. The current average participant saves 10.7%, suggesting many workers are close to but not quite meeting this target.
If you’re comparing your savings to these benchmarks, remember that individual circumstances vary significantly. Factors such as when you started saving, your income level, employer matching contributions, and investment performance all influence your account balance.
The key takeaway from Vanguard’s data is the importance of consistent, long-term saving combined with appropriate investment strategies. The success of automatic enrollment and escalation features demonstrates that systematic approaches to retirement saving can significantly improve outcomes.
Rather than focusing solely on whether you meet the median, concentrate on maximizing your savings rate, taking full advantage of employer matching, and maintaining a long-term investment perspective. The data shows that participants who stay the course and avoid frequent trading tend to achieve better retirement outcomes.
As Vanguard’s research consistently demonstrates, time in the market and consistent contributions remain the most powerful tools for building retirement wealth, regardless of where you currently stand relative to the median.
