Average 401(k) Balances for Recent Graduates

The average 401(k) balance for workers under 25 was $6,899 at the end of 2024, but the median was only $1,948. That gap shows how a few larger accounts lift the average, while many young workers are just beginning to save. Recent graduates also face a difficult job market and uneven access to workplace retirement plans.

Young workers face a tough start to retirement saving

Vanguard’s 2025 report puts the median balance for 401(k) participants under 25 at $1,948, compared with an average of $6,899. Vanguard does not separate account balances by education. Its under 25 group is more likely to include graduates, however, because workplace plans are more common in salaried jobs that often require a degree.

The Federal Reserve Bank of New York reported that both joblessness and underemployment among recent graduates exceeded the rates for workers overall in the first quarter of 2026. That reverses a pattern in which graduates generally had stronger employment outcomes. A difficult start can mean lower pay, inconsistent work or less room in a budget for retirement contributions.

The broader shift in retirement coverage raises the stakes. In 1980, 38% of private wage and salary workers participated in a defined benefit pension, which promises a regular retirement payment. By March 2025, just 14% of private sector workers had access to such a plan. For many younger employees, a 401(k) is the main workplace retirement benefit rather than an addition to a pension.

Auto enrollment and employer matches change the numbers

Plan design can determine whether a new employee starts saving at all. Among workers under 25 in Vanguard plans, participation reached 90% when enrollment happened automatically. It was 25% in plans that required workers to sign up themselves. Across all ages, automatically enrolled participants saved an average of 12.5% of pay, including the employer match, compared with 11.1% for people who enrolled voluntarily.

The match is another meaningful difference between plans. Fidelity reported that 88% of its 401(k) participants received an employer match in 2025. Vanguard’s typical match is 4% of pay. The amount and rules vary by workplace, so workers need to check their own plan documents to see how much they must contribute to receive the full match. Contributing less can mean missing part of the employer’s contribution.

Income also shapes balances. Vanguard participants earning under $15,000 had a median balance of $4,055. For participants earning $150,000 or more, the median was $221,220. Those figures describe account holders in different income groups, not the effect of income alone, but they show why a single balance benchmark can be misleading.

Saving patterns change with age and account choice

Vanguard’s age figures show how balances can build as workers contribute over time. The median 401(k) balance rises from $1,948 for people under 25 to $16,255 for those ages 25 to 34, then to $39,958 for those ages 35 to 44. These are group comparisons, not a forecast for any one person. Pay, job access, time in a plan and contribution levels all differ.

Household data also points to unequal progress among graduates. For households headed by someone ages 22 to 27 with a bachelor’s degree, median retirement assets, including IRAs and 401(k)s, were $1,600 in 2022, close to $1,960 in 2007 when adjusted to 2022 dollars. Over the same period, the average rose from $3,291 in 1992 to $23,288 in 2022, also in 2022 dollars. A flat median alongside a rising average suggests the largest gains were concentrated among households with more savings.

A Roth IRA offers a different tax treatment from a traditional workplace contribution: Roth contributions are taxed up front, while investment growth is tax free. In the third quarter of 2025, 95% of Gen Z IRA contributions went to Roth accounts, compared with 75% for millennials and 66% for Gen X. That share describes where contributions went, not how many people had an account. Anyone weighing account options can first check whether a workplace plan offers automatic enrollment and a match, then compare the plan’s terms with the rules and eligibility requirements for an IRA.