Average 401(k) Account Balances Plummeted Last Year. How Does Yours Compare to the Typical American's? More Americans are taking hardship withdrawals from their accounts, too.
By Amanda Breen Edited by Jessica Thomas
Inflation's hitting Americans — and their retirement savings — hard.
The average balance in employer-sponsored contribution plans dropped more than 20% last year, according to new research from Vanguard Group reported by Fox Business.
Vanguard tracks roughly five million retirement accounts and found that the average balance for 401(k)s and 403(b)s was $112,572 in 2022 — a $30,000 dip from the year before. The decline was "driven primarily by the decrease in equity and bond markets," per the report.
Related: Americans Aren't Saving Enough — Inflation, Spending to Blame
Additionally, one in three survey participants had an account balance of less than $10,000, while one in four had one exceeding $100,000 and just 12% had one of $250,000 or more.
The number of Americans taking a hardship withdrawal from their employer-sponsored accounts is also on the rise: 2.8% did so in 2022 — up from the 2% that did before the pandemic, according to the report.
Inflation has led consumers to withdraw an average of $616.73 from their savings accounts to keep up with their expenses, according to a New York Wealth Watch Survey reported by USA Today.
Related: Americans' Debt Just Exceeded $17 Trillion for the First Time
Americans are also accumulating significant credit card debt to make ends meet: They hold a record debt amount of nearly $991 billion, per the Federal Reserve Bank's latest data.
