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Report reveals 401(k) balances reach record levels due to increase in automatic enrollment

June 19, 2026

Record High Contributions to 401(k) Accounts in 2025

A recent report from Vanguard reveals that American contributions to 401(k) savings accounts reached an all-time high in 2025.

According to the findings, the median account balance for employees with active 401(k) plans rose by 27% from December 2024 to December 2025. The report notes that 94% of participants saw their account balances grow, attributing this increase to both higher contributions and market gains.

The average balance in Vanguard 401(k) accounts surged to $167,970 in 2025, which is nearly a $20,000 increase from the 2024 average of $148,153. Similarly, the median account balance went up from $38,176 in 2024 to $44,115 in 2025.

One significant factor behind this rise in contributions could be the shift towards automatic employee enrollment in 401(k) plans. By 2025, 61% of Vanguard’s defined contribution plans had implemented autoenrollment, a significant jump from just 10% in 2006.

The idea here is that by defaulting employees into the plans, it’s easier for them to participate. The report explains that with this “autopilot” method, individuals are automatically enrolled and their contributions are regularly adjusted and invested in a balanced strategy. This means they are, in a sense, opting out if they choose not to remain in the plan.

Interestingly, employees’ contribution rates remained fairly consistent. In 2025, employees deferred an average of 7.6% of their income, which mirrored the rate from 2024. The median deferral was slightly lower, at 6.6% compared to 6.7% the previous year. Notably, a quarter of participants managed to defer over 10% of their income, up from just 20% in 2016.

However, not everything in the report paints a rosy picture. Withdrawals due to hardship have risen for four years in a row, now at 6% in 2025, up from 5% the year before. While the rise in withdrawals may reflect the strain from inflation and various economic pressures, the report does indicate that recent changes to make accessing these funds easier when needed could also play a role.