Most water heaters ship set to 140°F. Most households should run at 120°F. That 20-degree difference matters: 120°F reduces scald risk (especially for kids and elderly), cuts energy costs by 6-10%, and slows mineral buildup in the tank. But there is a reason not to go below 120°F -- Legionella bacteria thrive between 77°F and 113°F. Below 120°F, your tank becomes a breeding ground. The sweet spot is 120°F for most homes, 130-140°F if you have a dishwasher without a built-in heater or immunocompromised household members.