Your 401(k) Is Up, But Your Net Worth Might Be Shrinking

The 401(k) Talking Point Is Running Out of Gas

I am going to be straight with you. I am in this business. I push 401(k)s. I recommend them. I think every working American who can contribute to one should. But when politicians start waving around rising retirement balances as evidence that everyday Americans are thriving, I have to call it what it is: a talking point that only tells part of the story.

Let me give you the actual numbers. These are changes in median net worth by age group from 2022 to today.

• Age 75 and older: UP 37%
• Age 65 to 74: DOWN 4%
• Age 55 to 64: UP 2%
• Age 45 to 54: DOWN 6%
• Age 35 to 44: UP 4%
• Under age 35: DOWN 23%

Look at that list carefully. The only group absolutely crushing it on net worth is the 75-and-older crowd, up nearly 37%. Good for them. They have earned it. But everyone else? It is a mixed bag at best and a disaster at worst, especially for younger Americans who are down nearly a quarter of their net worth in just a few years.

A Growing 401(k) Does Not Buy Groceries

Here is the reality that no one on a political stage wants to say out loud. If you are in your late 30s, you have a family, you have done everything right, you have been contributing consistently to your retirement account, and that account is up significantly, that is genuinely great. Long term, you are building something real.

But it does not help you with what groceries cost this week. It does not help you with rent, with your car payment, with childcare. That money is locked away, and while loan provisions from 401(k) plans were temporarily expanded during COVID from $50,000 to $100,000, they are back down to $50,000 now. And borrowing from your retirement account to cover daily living expenses is not a financial strategy. It is a warning sign.

The political messaging around this is tone-deaf to what people under 55 are actually experiencing. Rising markets and AI stocks hitting new highs are real phenomena. But the wealth being generated there is not evenly distributed across age groups, and it is certainly not showing up in the day-to-day financial reality of younger working families.

What Actually Needs to Happen

If the goal is to make Americans across all age groups financially healthier, the focus has to be on reducing the cost of living, not just celebrating asset price appreciation. That means:

• Taking a serious look at tariff policy and whether the current approach is adding costs that ultimately land on consumers
• Examining the impact of corporate tax rates on business investment and pricing
• Addressing the ongoing geopolitical conflicts that are contributing to energy and commodity price pressures

These are harder conversations than pointing to a stock market chart. But they are the conversations that actually matter for the 35-year-old trying to figure out how to build wealth while also keeping the lights on.

The Bottom Line

I believe in retirement accounts. I believe in the power of long-term compounding. I am not walking any of that back. But net worth data does not lie, and right now it is telling us that rising retirement balances are masking a much more complicated financial picture for a significant portion of the American population. The people running economic messaging need to stop congratulating themselves and start focusing on what actually moves the needle for working families today, not just twenty years from now.