Inside Vanguard's alarming state of retirement in 2026

Key Points:

• The average 401(k) balance among nearly 5 million Vanguard accounts reached a record $167,970 at the end of 2025, up 13% from the previous year, driven by a strong stock market.
• The median 401(k) balance, however, is only $44,115, highlighting significant inequality as a small group of high-balance savers skew the average upward while most Americans have far less saved.
• Despite record balances, 6% of Vanguard participants made hardship withdrawals in 2025, a rising trend that reflects financial strain among many savers, with median withdrawals around $1,900.
• Experts attribute poor retirement outcomes less to individual workers and more to plan design, noting that automatic enrollment and professionally managed default funds significantly boost savings, while many workers lack access to such plans.
• Vanguard recommends saving 12% to 15% of annual pay, but many Americans fall short due to competing financial demands, and the retirement system has failed to adequately address these gaps despite decades of awareness.