Average 401(k) Balance By Age - How Much Should You Have? | Bankrate (2024)

Investors have been on quite a ride the past few years. Consistent contributors to retirement plans, such as a 401(k), have been largely rewarded by staying the course through the ups and downs in the markets during the bear market of 2022 and interest rate hikes by the Federal Reserve.

Average 401(k) plan balances reached $112,572 in 2022, down from $141,542 in 2021 and $129,157 in 2020, according to Vanguard’s “How America Saves 2023” report.

While short-term market volatility is inevitable, it’s important not to overreact to large swings in price. Remember to stay focused on your long-term investment plan and keep building up that retirement nest egg.

Average and median 401(k) balance by age

These are the average and median balances for specific age groups at the end of 2022, according to Vanguard, which gathered data from 5 million defined contribution plan participants across its recordkeeping business.

AgeAverage Account BalanceMedian Account Balance
Source: Vanguard, “How America Saves 2023”
Under 25$5,236$1,948

Age 25 and younger

  • Average 401(k) balance: $5,236
  • Median 401(k) balance: $1,948

The median balance for people just getting started in their careers is $1,948 . That means half of 401(k) plan participants in this age group have less than that amount saved and half have more. The average balance is quite a bit higher, skewed by those who are able to save more in their 401(k).

How much should you strive to save for retirement? Fidelity, which manages employee benefits programs for more than 22,000 businesses and offers a variety of financial planning services, suggests saving at least 10 times your annual salary by age 67.

The firm also advocates following another metric: Save 15 percent of your pretax income from the time you begin your career – including any company match. So, if your employer matches 3 percent of your salary, you’d need to save 12 percent. If current expenses preclude this possibility, work toward that amount as a goal.

Ages 25-34

  • Average 401(k) balance: $30,017
  • Median 401(k) balance: $11,357

Again, the average 401(k) balance is more than twice the median balance, reflecting the larger savings capacity of high-wage earners and those resolved to maximizing their 401(k) plan.

By age 30, Fidelity recommends having the equivalent of one year’s salary stashed in your workplace retirement plan. So, if you make $50,000, your 401(k) balance should be $50,000 by the time you hit 30.

If you’re running behind, try increasing your contribution amount by a couple of percentage points when you can during your 30s. This is especially easy if you time the increase with any raises or bonuses you get. This way you don’t feel any pinch in disposable income. In fact, it will help keep your spending in check if you live beneath, rather than above, your means.

Ages 35-44

  • Average 401(k) balance: $76,354
  • Median 401(k) balance: $28,318

In your 40s, you have lots of financial obligations – typically a mortgage payment, and perhaps a family with all its related costs. Still, it’s important to defer a good portion of your income toward your 401(k) so you don’t shortchange your golden years. You still have roughly 20 years before the conventional retirement age, so make the most of your savings opportunities.

Fidelity says by age 40, aim to have a multiple of three times your salary saved up. That means if you’re earning $75,000, your retirement account balance should be around $225,000 when you turn 40.

If your employer offers both a traditional and Roth 401(k), you might want to divide your savings between the two. When you hit retirement age and it’s time to take withdrawals, you’ll have to pay tax on money taken from the traditional 401(k), but not from the Roth, since it’s funded with after-tax contributions.

Ages 45-54

  • Average 401(k) balance: $142,069
  • Median 401(k) balance: $48,301

During this decade you may be getting a larger paycheck than ever, and perhaps you can maximize your 401(k) plan. The 2024 contribution limit is $23,000. Those aged 50 and older can add another $7,500 to that amount, for a total of $30,500. You might also be able to max out a traditional or Roth IRA; the limit this year is $7,000 for those under 50, but you can bump that up by another $1,000 as a catch-up contribution if you’re older than 50.

By age 50, Fidelity suggests you should have accumulated a multiple of six times your current salary. That same $75,000 salary would equate to a 401(k) balance of $450,000 by the time you reach 50. The median balance for those aged 45-54 indicates that at least half of workers are not even close to accomplishing that goal. Retirement will be here before you know it, so increase your savings rate if you can.

Ages 55-64

  • Average 401(k) balance: $207,874
  • Median 401(k) balance: $71,168

Those in or near retirement had better be diversified in other asset classes besides stocks – such as bonds and cash instruments, which can offer stability to a portfolio during stormy times.

It’s crunch time. Do you have 10 times your annual salary saved up? The average 401(k) balance reflects the fact that many people have saved quite a bit more than $207,874 . Alas, the median balance reveals that many people have saved quite a bit less.

Fidelity says by age 60 you should have eight times your current salary saved up. So, if you’re earning $100,000 by then, your 401(k) balance should be $800,000.

How much do you need to retire?

How much money you’ll need to retire will vary from person to person depending on different factors such as how long you expect to live, where you live and the investment returns you expect to earn. Estimating your annual expenses is a big factor in knowing how much you’ll need during retirement because these are the costs you’ll need to cover with your savings.

How much money do you need to pay your bills each month? Multiply this figure by 12 for an annual estimate and then multiply the total again by 30 in case you live another 30 years. This rough calculation doesn’t take into consideration investment earnings or inflation, but it offers a ballpark of your future needs. Be sure to include health care expenses in your calculation.

Another popular method is known as the 4 percent rule. This method calls for withdrawing no more than 4 percent of your retirement account balance in any given year to help make it last for the duration of your retirement. Some advisors think this approach isn’t conservative enough, but it can help provide a rough guideline for what you’ll need to save. Take the amount you’ll need each year and multiply it by 25 to arrive at the savings you’ll need.

Bottom line

While Social Security can kick in as early as age 62 for most people, full benefits aren’t available until you reach age 66 or 67, depending on the year you were born.

Don’t expect the monthly stipend from Social Security to meet all your financial needs. It’s only intended to lift the elderly out of poverty. You want more than that. If you don’t have it yet, you might want to continue earning money for a while longer. Working longer can help ensure that you’re able to meet your financial needs during your golden years.

Average 401(k) Balance By Age - How Much Should You Have? | Bankrate (2024)


Average 401(k) Balance By Age - How Much Should You Have? | Bankrate? ›

However, the general rule of thumb, according to Fidelity Investments, is that you should aim to save at least the equivalent of your salary by age 30, three times your salary by age 40, six times by age 50, eight times by 60 and 10 times by 67.

What should my 401k balance be by age? ›

However, the general rule of thumb, according to Fidelity Investments, is that you should aim to save at least the equivalent of your salary by age 30, three times your salary by age 40, six times by age 50, eight times by 60 and 10 times by 67.

How much do I need in 401k to get $2000 a month? ›

With the $1,000 per month rule, if you plan to withdraw 5% of your savings each year, you'll need at least $240,000 in savings. If you aim to take out $2,000 every month at a withdrawal rate of 5%, you'll need to set aside $480,000. For $3,000, you would aim to save $720,000.

Can I retire at 62 with $400,000 in 401k? ›

If you have $400,000 in the bank you can retire early at age 62, but it will be tight. The good news is that if you can keep working for just five more years, you are on track for a potentially quite comfortable retirement by full retirement age.

At what age should you have 100000 in 401k? ›

“By the time you hit 33 years old, you should have $100,000 saved somewhere,” he said, urging viewers that they can accomplish this goal. “Save 20 percent of your paycheck and let the market grow at 5% to 7% per year,” O'Leary said in the video.

What is a healthy 401k balance? ›

Fidelity says by age 60 you should have eight times your current salary saved up. So, if you're earning $100,000 by then, your 401(k) balance should be $800,000.

How many people have $1000000 in retirement savings? ›

However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings.

Can I live on $2000 a month in retirement? ›

Retiring on a fixed income can seem daunting, but with some planning and commitment to a frugal lifestyle, it's possible to retire comfortably on $2,000 a month. This takes discipline but ultimately will allow you to have more freedom and happiness in your golden years without money worries.

How long will $300,000 last in 401k? ›

Summary. $300,000 can last for roughly 26 years if your average monthly spend is around $1,600. Social Security benefits help bolster your retirement income and make retiring on $300k even more accessible. It's often recommended to have 10-12 times your current income in savings by the time you retire.

At what age is 401k withdrawal tax free? ›

Once you reach 59½, you can take distributions from your 401(k) plan without being subject to the 10% penalty. However, that doesn't mean there are no consequences. All withdrawals from your 401(k), even those taken after age 59½, are subject to ordinary income taxes.

Is $1,500 a month enough to retire on? ›

While $1,500 might not be enough for non-housing retirement expenses for many people, it doesn't mean it's impossible to stick to this or other amounts, such as if you're already retired and don't have the ability to increase your budget.

How long will $500,000 last in retirement? ›

Yes, it is possible to retire comfortably on $500k. This amount allows for an annual withdrawal of $20,000 from the age of 60 to 85, covering 25 years. If $20,000 a year, or $1,667 a month, meets your lifestyle needs, then $500k is enough for your retirement.

How much money does the average American retire with? ›

The Federal Reserve's most recent data reveals that the average American has $65,000 in retirement savings. By their retirement age, the average is estimated to be $255,200.

How much money do most people retire with? ›

Average retirement savings balance by age
Age groupAverage retirement savings balance amount
1 more row
Mar 5, 2024

What is a good monthly retirement income? ›

Average Monthly Retirement Income

According to data from the BLS, average 2022 incomes after taxes were as follows for older households: 65-74 years: $63,187 per year or $5,266 per month. 75 and older: $47,928 per year or $3,994 per month.

What is a good 401k balance at age 65? ›

Key takeaways. According to the Federal Reserve, the average 401(k) balance is around $30,000 for those under 35, around $132,000 for those ages 35–44, around $255,000 for those ages 45–54, around $408,000 for those ages 55–64, and around $426,000 for those ages 65–75.

Can I retire at 60 with 300k? ›

£300k in a pension isn't a huge amount to retire on at the fairly young age of 60, but it's possible for certain lifestyles depending on how your pension fund performs while you're retired and how much you need to live on.

How much should a 70 year old have in a 401k? ›

How Much Should a 70-Year-Old Have in Savings? Financial experts generally recommend saving anywhere from $1 million to $2 million for retirement. If you consider an average retirement savings of $426,000 for those in the 65 to 74-year-old range, the numbers obviously don't match up.

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