Americans' Reliance on 401(k)s Versus Other Retirement Income Sources
A significant portion of retirees do not rely primarily on their workplace retirement plans, such as 401(k)s, for income in retirement. According to a Vanguard report from 2025, the median balance among Americans aged 65 and older is about $95,425, which translates into roughly $3,800 annually using the 4% withdrawal rule—insufficient as a sole source of living expenses. A Congressional Research Service analysis shows that Social Security accounts for approximately 30% of total retirement income among Americans aged 65 and older. Earnings from wages or self-employment make up another 27%, while pensions, including defined benefit plans and IRA distributions, account for about 24%. The composition shifts with age: younger retirees rely more on earnings, whereas Social Security becomes a larger share as they grow older. The disparity between workers' expectations of relying heavily on their 401(k)s versus the actual income mix in retirement highlights the importance of diversifying sources. Many 401(k) balances are rolled into IRAs by retirement age, which may explain why retirees report less direct reliance on workplace plans.
Topics: 401(k) income distribution IRA retirement savings Social Security