--- title: 401(k) Balances Plummeted 20% Last Year Even as Workers Saved More Than Ever description: Workers saved more than ever in their retirement accounts in 2022, but the average 401(k) balance dropped 20% due to stock market troubles. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 503 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-06-16T18:59:33.000Z' modified: '2024-04-17T13:10:47.000Z' section: Retirement tags: - News - stocks word_count: 651 canonical: https://money.com/average-401k-balance-plummeted-last-year/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Tower of blocks analogy with money](https://img.money.com/2023/06/News-How-Much-Average-401k-Fell-2022.jpg?crop=0px%2C166px%2C2880px%2C1620px&quality=85) Amid soaring inflation and tumbling markets, the typical retirement account balance took a beating last year. According to an analysis by the investment management firm [Vanguard](https://money.com/vanguard-review/), [401(k)](https://money.com/what-is-a-401k-rollover/) balances fell more than 20% last year as the stock market struggled through its [worst year since the Great Recession](https://money.com/investor-tips-after-stocks-worst-year/). But it wasn’t all bad news, the firm said, as savers stayed the course and continued socking away a record-high share of their salaries. Financial experts say [market downturns can be great buying opportunities](https://money.com/why-keep-investing-when-stocks-down/) over the long run, and those workers who made regular contributions during this time when stocks were cheap could see large gains in the future. The recent return of a [bull market](https://money.com/stocks-are-in-bull-market-will-it-last/), in fact, is already benefitting investors who bought stocks last year. “Despite significant market uncertainty, nearly a quarter of participants saved at least 10% of their income for retirement” last year, the firm [announced Thursday](https://corporate.vanguard.com/content/corporatesite/us/en/corp/who-we-are/pressroom/press-release-vanguard-reports-record-401k-participation-061523.html), “and the average deferral rate remained at a historic high of 7.4%.” John James, managing director of Vanguard’s institutional investor group, recommends that workers should ideally be saving between at least 12% to 15% of their pay for retirement. “We’re not there yet — but we’re close,” he wrote in Vanguard's report. ## What the research says In Vanguard’s latest annual “[How America Saves](https://institutional.vanguard.com/how-america-saves/)” report, the firm analyzed data on its nearly 5 million retirement account holders, almost all of them using [401(k)s](https://money.com/401k-and-401k-rollover/) or [403(b)s](https://money.com/collection-post/difference-between-401k-and-403b-plan/) to [save for retirement](https://money.com/save-for-retirement/). - The firm found that both average and median retirement account balances plummeted by more than 20% last year. - In 2022, the average retirement account balance was $112,572; the year prior, the balance was $141,542, a difference of nearly $29,000 — for a decrease of 20.5%. - Over that same period, the median retirement account balance fell from $35,345 to $27,376 — shrinking almost $8,000 or 22.5%. ## Key context These stark drops in balances are despite the fact that workers were participating in retirement accounts at a record-high rate of 83%, tucking away an average 7.4% of their salaries by themselves — tied with 2021 for the highest share ever recorded by Vanguard. On average, employers also contributed 3.9% of their workers’ salaries to retirement accounts, bumping that combined savings rate to 11.3%, which is in line with 2019 levels. Hardship withdrawals ticked up notably last year, with 2.8% of savers tapping their retirement accounts to make ends meet as [inflation skyrocketed to as high as 9.1%](https://money.com/inflation-june-2022-cheaper-prices/). This is the highest hardship-withdrawal rate in at least 15 years. Still, much of the drop in balances can be attributed to the [stock market in 2022](https://money.com/investor-tips-after-stocks-worst-year/), with the broad losses of stock indexes mirroring the cratering balances of people’s 401(k)s. - Last year, the [S&P 500](https://money.com/how-to-invest-in-sp500/?ref=/investor-tips-after-stocks-worst-year/) — a benchmark index for U.S. [stocks](https://money.com/how-to-buy-stocks/?ref=/investor-tips-after-stocks-worst-year/), ended the year down 19.4%. The Dow Jones Industrial Average fell almost 9% for the year, and the tech-heavy Nasdaq Composite sunk 33%. Similarly, a recent report from Fidelity Investments also found that retirement accounts [dropped around 20%](https://money.com/average-401k-balance-2022-stock-market/) last year, with the stock market’s plunge [wiping out a third of 401(k) millionaires](https://money.com/drop-in-401k-millionaires-stock-market/). ## Average 401(k) balances by age and gender Percentage-wise, Vanguard’s data suggests that retirement account balances fell fairly uniformly last year across demographics. However, the balances themselves can vary widely depending on the saver’s age and gender. - In 2022, the average woman had $95,570 saved in her retirement account. On the other hand, the average man had about $137,000 — a stark retirement gap of more than 43%. Age also plays a large role in the average account balances. As one might expect, the older the saver, the larger the balance: - **Under 25:** $5,236 - **25 to 34:** $30,017 - **35 to 44:** $76,354 - **45 to 54:** $142,069 - **55 to 64:** $207,874 - **65 and up:** $232,710 [Wealthy Americans Aren’t Worried Enough About Retirement: Report](https://money.com/retirement-savings-worried-risk-survey/) [Forget FAANG, Meet the 'Magnificent Seven' Stocks Surging in 2023](https://money.com/faang-magnificent-seven-tech-stocks/) [Social Security Recipients Shouldn't Count on Another Huge Raise Next Year](https://money.com/social-security-cola-next-year-2024/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/average-401k-balance-plummeted-last-year/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "401(k)", "item": "https://money.com/401k/" }, { "@type": "ListItem", "position": 4, "name": "401(k) Balances Plummeted 20% Last Year Even as Workers Saved More Than Ever" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/average-401k-balance-plummeted-last-year/#webpage", "url": "https://money.com/average-401k-balance-plummeted-last-year/", "name": "401(k) Balances Plummeted 20% Last Year Even as Workers Saved More Than Ever", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-06-16T18:59:33.000Z", "mainEntity": { "@id": "https://money.com/average-401k-balance-plummeted-last-year/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/average-401k-balance-plummeted-last-year/#breadcrumb" }, "dateModified": "2024-04-17T13:10:47.000Z" }, { "@type": "NewsArticle", "headline": "401(k) Balances Plummeted 20% Last Year Even as Workers Saved More Than Ever", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/06/News-How-Much-Average-401k-Fell-2022.jpg?crop=0px%2C166px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-How-Much-Average-401k-Fell-2022" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. 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