Contributing to a 401(k) is one of the easiest and most effective ways to save for retirement.
The 401(k) offers a contribution limit of $23,500 per year in 2025, compared to just $7,000 per year for IRAs. When you set up direct transfers from your paycheck straight to your 401(k), you can also set your savings on autopilot, helping you save more over time.
But just how much does the average American have stashed in their 401(k)? It varies based on a few factors, such as age and career length. But there's also a stark difference by salary range. No matter how much you have in your account, though, there's one incredibly simple way to save more.
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The average 401(k) balance by salary
Vanguard's annual How America Saves report provides a snapshot of Americans' financial health, including the average and median account balances among Vanguard 401(k) participants.
According to the most recent report released in 2024, the average 401(k) balance across all participants is $134,128, while the median sits at just $35,286. However, when broken down by salary, the numbers vary significantly.
| Annual Income | Average 401(k) Balance | Median 401(k) Balance |
|---|---|---|
| Under $15,000 | $24,175 | $3,691 |
| $15,000 to $29,999 | $18,610 | $6,142 |
| $30,000 to $49,999 | $25,096 | $10,072 |
| $50,000 to $74,999 | $59,273 | $24,939 |
| $75,000 to $99,999 | $106,875 | $51,073 |
| $100,000 to $149,999 | $178,818 | $91,323 |
| $150,000 and higher | $336,470 | $188,678 |
Data source: Vanguard. Table by author.
The average figures skew higher, as they can be distorted by extremely high earners. The median figure may more accurately represent the typical American, as it's the middle figure where half of the values are higher and half are lower.
The simplest way to save more in your 401(k)
While there are many strategies for boosting your savings, one of the simplest is to take advantage of employer matching 401(k) contributions. If your plan offers this perk, it could instantly double your savings with basically zero effort on your part.
The median wage among U.S. workers is $1,159 per week, according to 2024 data from the Bureau of Labor Statistics, or just over $60,000 per year. Let's also say your employer will match 100% of your 401(k) contributions up to 3% of your salary.
If you're earning $60,000 per year, that would amount to $1,800 per year in matching contributions. Here's approximately how much you could earn in total by saving $1,800 per year while earning the full match, compared to only contributing, say, $1,500 per year and earning the same amount in matching contributions.
| Number of Years | Total Savings: Contributing $1,500 per Year + $1,500 per Year in Matching Contributions | Total Savings: Contributing $1,800 per Year + $1,800 per Year in Matching Contributions |
|---|---|---|
| 20 | $172,000 | $206,000 |
| 25 | $295,000 | $354,000 |
| 30 | $493,000 | $592,000 |
| 35 | $813,000 | $976,000 |
Data source: Author's calculations via investor.gov. Calculations assume a 10% average annual return on investment.
In this case, contributing just $300 more per year (plus earning an extra $300 per year from your employer) could add up to around $163,000 in total savings over 35 years.
Most people will also see their income increase as they advance in their careers. Since the employer match is often a percentage of your salary, the higher your wages, the more you can earn in matching contributions. Over time, you could effortlessly earn more per year from your company match.
Whether your savings fall above or below the average for your income bracket, it never hurts to save a little more. By taking advantage of the 401(k) company match, you could boost your savings by hundreds of thousands of dollars by retirement.
