12 States With The Lowest Average 401(k) Balances (How Do Your Savings Compare?)

The amount you have saved in your 401(k) can depend as much on where you live as on how much you earn. Economic factors like wages, cost of living, and employment opportunities shape how well residents can save for the future as well as their overall financial fitness.

Below are the 12 states with the lowest average balances — and how household income and poverty levels play a major role in shaping retirement readiness across the country.

According to Fidelity Investments' Q2 2025 Retirement Analysis, the national average 401(k) balance in the U.S. is $137,800, which provides a good benchmark for evaluating where states fall short.

Regional income gaps and cost-of-living differences mean some Americans can contribute more to their retirement plans than others. Here's how each state stacks up and what challenges residents face when trying to grow their retirement savings.

Average 401(k) balance: $20,000

Mississippi ranks last, with residents holding an average 401(k) balance of $20,200. The median household income is just $54,203, compared to the national average of $80,610, according to U.S. Census data. The state's 18.0% poverty rate — one of the highest in the nation and well above the 12.5% national average — leaves little room for long-term savings, even among working residents.

Average 401(k) balance: $21,200

Louisiana's average balance of $21,200 is slightly higher than Mississippi's, but its residents still face steep financial hurdles. According to U.S. Census data, the median household income is $58,229, approximately $4,000 higher than Mississippi's but still well below the national average. With an 18.9% poverty rate, saving for retirement is often secondary to meeting basic living costs.

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Average 401(k) balance: $30,000

Alabama ties for third place with Kentucky and Missouri, each averaging $30,000 in 401(k) savings. Residents have a median household income of $62,212 and a 15.6% poverty rate, both modestly better than in Mississippi and Louisiana, as per U.S. Census data. The slightly stronger income base likely explains why Alabama workers can contribute a bit more toward their retirement goals.

Average 401(k) balance: $30,000

Kentucky matches Alabama's $30,000 average balance but faces its own economic challenges. U.S Census data reveals that the median household income is $61,118, slightly lower than Alabama's, and the poverty rate sits at 16.4% which is among the higher figures nationally. These pressures may make it more difficult for many Kentucky residents to consistently build their retirement savings.

Average 401(k) balance: $30,000

Missouri's average balance matches Alabama's and Kentucky's, but the economic picture is brighter. However, residents enjoy a higher median household income of $68,545 and a 12.0% poverty rate, which is slightly better than the national average as per U.S. Census data.

Average 401(k) balance: $35,100

West Virginia's 401(k) average sits at $35,100. U.S. Census data shows that the median household income is $55,948, and the poverty rate stands at 16.7%, placing it among the highest in the U.S. The state's limiting economic factors may limit opportunities for residents to boost long-term savings.

Average 401(k) balance: $36,990

U.S. Census data highlights that Arkansas ranks seventh with a $36,990 average 401(k) balance. Its median household income is $58,700, and the poverty rate is 15.7%, both close to other Southern states on the list.

Average 401(k) balance: $39,000

With an average balance of $39,000, Idaho residents save slightly less than the national median but outperform many Southern states. The median household income is $74,942, and the poverty rate is 10.1%, as indicated by U.S. Census data.

Average 401(k) balance: $39,100

Oklahoma edges ahead of Idaho with an average 401(k) balance of $39,100. The median household income is $62,138, and the poverty rate is 15.9%, notably higher than the U.S. average of 12.5%, according to U.S. Census data. This may suggest that many households are relying more heavily on current earnings and focusing less on long-term savings.

Average 401(k) balance: $40,000

Florida ties with Tennessee and Texas for an average 401(k) balance of $40,000. U.S. Census data shows that the state's median income is $73,311, and its poverty rate of 12.3% is just below the national average.

Average 401(k) balance: $40,000

Tennessee residents share the same $40,000 average balance as Florida and Texas, but have a lower median household income of $67,631, according to U.S. Census data. The 14.0% poverty rate remains above the U.S. average, which may leave less disposable income for retirement contributions.

Average 401(k) balance: $40,000

Texas rounds out the list with an average 401(k) balance of $40,000. Despite a median household income of $75,780, the poverty rate is 13.7%, which is slightly higher than the national figure as per U.S. Census data.

For tax year 2025, the IRS increased the 401(k) contribution limit to $23,500, up from $23,000 in 2024. Workers aged 50 and older can contribute an additional $7,500 in catch-up contributions, allowing more flexibility to close savings gaps later in their careers.

Even if your state ranks low, small adjustments can make a big difference in the long run.

If your employer offers a match, contribute at least enough to get the full benefit — it's essentially free money toward your retirement. Over time, compound growth on matched funds can add thousands to your balance.

Keeping expenses lower than your income frees up extra cash for savings. A smaller home or fewer discretionary purchases may help boost contributions to your 401(k) without requiring a higher salary.

Supplemental income from part-time work or freelance projects can accelerate your retirement savings. Even contributing half of your side income may significantly increase your balance over time.

Where you live can have a surprising impact on your retirement savings, but your personal habits matter even more. Whether your state ranks high or low, understanding the numbers can motivate you to start investing more consistently and take advantage of tax-advantaged accounts.

With steady contributions and smart budgeting, you can ensure your financial future doesn't depend solely on where you call home.