Do you ever wonder how your retirement savings stacks up to others? In this video I share the average {and median} 401k balance by age so you can compare. The numbers all come from Vanguard’s ‘How America Saves’ 2022 edition.
Average Net Worth by Age:
Average Income by Age:
0:00 Start
0:20 How America Saves 2022 Intro
1:20 401k balance for under 25
2:26 401k balance for 25-34
3:48 401k balance for 35-44
4:38 401k balance for 45-54
5:56 401k balance for 55-64
6:18 401k balance for 65+
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Average 401K Savings BY AGE // How does your 401k compare?
Retirement planning is an essential aspect of financial management that people often overlook until it’s too late. While government-backed programs like Social Security exist to provide some financial support during retirement, it is crucial to have an additional savings plan in place. One of the most popular retirement savings options in the United States is the 401K plan, offered by employers to help employees save for their golden years.
A 401K plan allows employees to contribute a portion of their salary to a tax-advantaged investment account, which typically consists of a range of investment options such as mutual funds, stocks, and bonds. The funds contributed are often matched by the employer, providing a significant boost to the savings. However, the average savings in a 401K by age can vary widely depending on many factors such as income, financial discipline, and the number of years someone has been contributing.
To understand how your 401K stacks up against the average, let’s examine the average 401K savings by age:
1. 20s: In the early stages of their career, individuals in their 20s may not have accumulated significant wealth. The average 401K balance for this age group is around $10,000. Starting early and consistently contributing to a retirement account can provide a significant advantage in the long run.
2. 30s: By the time individuals reach their 30s, their income generally increases, allowing them to save more for retirement. The average 401K balance for this age group jumps to approximately $32,000, given the additional years of contributions.
3. 40s: Individuals in their 40s often experience higher salaries and are typically in the peak of their earning potential. Consequently, they tend to have more disposable income to allocate towards retirement savings. The average 401K balance for this group is estimated to be around $93,000.
4. 50s: As individuals approach their 50s, retirement becomes a more imminent reality. Consequently, the average 401K balance for this age group increases to approximately $160,000. Many people begin contributing even more to their retirement accounts during this phase, taking advantage of catch-up contribution allowances as they near retirement age.
5. 60s and beyond: Individuals in their 60s who have diligently contributed to their retirement accounts may have amassed a significant sum of money by this point. The average 401K balance for this group is around $182,000. At this stage, retirees often begin to transition towards converting their accumulated savings into income streams for retirement.
It is important to note that these average figures can vary significantly based on individual circumstances such as income level, personal emergencies, and the market performance of the investment portfolio. Furthermore, these averages should serve as a benchmark rather than a definitive target. Individuals should strive to save as much as possible and work towards their personal retirement goals.
If you find that your 401K balance falls below these average figures, do not despair. There are several steps you can take to improve your retirement savings:
1. Maximize your contributions: Aim to contribute the maximum allowed amount to your 401K each year. Taking advantage of employer matching programs can significantly boost your savings.
2. Review your investment strategy: Ensure that your investment portfolio is aligned with your risk tolerance and long-term goals. Consider seeking advice from financial professionals to optimize your investments.
3. Consider additional retirement savings options: Explore other retirement savings vehicles such as Individual Retirement Accounts (IRAs) or taxable investment accounts to supplement your 401K savings.
4. Keep up with savings discipline: Maintain consistent contributions to your retirement account and resist the urge to withdraw funds prematurely. Remember, compounding interest can make a significant difference in the long run.
Taking all these steps can help you improve your retirement savings and ensure financial security during your golden years. Comparing your 401K savings to the average figures by age can provide valuable insights into areas that need improvement. Start planning and saving for your retirement as early as possible, and remember, it is never too late to take control of your financial future.
Check out the average net worth by age here: https://youtu.be/PlVXD1TXYV4
I get 50% match on any contribution I make to my 401k.
I started late. About to hit $30k in my 401(k). I'm 55, now contributing 10%, max employer match adds 3% to that (50% match up to my 6%). But they also contribute that on any bonus money paid (my previous employer did not match or deduct employee contributions on bonuses). Also another few things I have going for me: never had kids. Wife and I both are disabled (she's got m.s. and I've had T1 diabetes almost 4 decades). In other words we won't likely have a long retirement to fund. I have an office job so I can easily work well past normal retirement age. And I have $500k in life insurance on me in case I go first. Plus my company just made me a partner, which means each year I get equity ownership gifted and earnings from prior years on previous equity. We'll be just fine, thankfully. Will be credit card debt free in October 2023 (all are promotional period 0% interest). Car debt free in another 6-months after that. Then mortgage free in 8-years. Just finished doing a lot of remodeling (new roof, HVAC system, water heater, windows & doors in & out, all bathrooms completely new, and soon to do new kitchen & flooring). So we shouldn't have any major house repair expenses the rest of our lives.
Yeah I get 50% match up to 6% so 3% I guess.
6% for me
I’m a college professor at a large public university and my employer contributes 13%. It’s not really a ‘match’ – they put that in regardless of what I do. I contribute 7% myself.
This makes me feel much better about my 401k
I wish finances was taught in school when I was growing up. I come from a lower middle class family and my parents didn't save responsibily, so I didn't get any real financial training at home. And no internet back then. I am now 64. Retired in 2021. My wife and I were late realizing that we better save for our retirement. Didn't really get serious about it until in our early 40's. Luckily we both had good salaries and by the time we'd had enough of working we'd accumulated 1.3 million in our various retirement accounts. But it took sacrifice to save. Worth it now. I'm the first person in my family to have close to a 2 million dollar net worth. Anyway, it's never too late to start saving. But the sooner you start the better.
I've NEVER been significantly above average in ANYTHING in my life until today.
Employer matches 4.5%. I am 40 years old and have balance over 200k. Company also provides a pension which has a balance of 36k right now.
Your husband is a teacher? And gets a match?
Thank you so much. I am trying to figure out how much to withdraw from my 401(k) next year when I’m 65 and retire. Keep up the good work people will catch on!
Where I worked you can contribute up to over $45k/yr in only my aftertax and Roth of my 401k.
I took advantage of it and well above average.
My 401k crossed $1.6 million in 2019.
Retired at 49 in 2020 with company medical and pension thanks to Covid.
Did in service rollover with 80% into rollover pretax and Roth IRA.
Total of around two million with half invested.
Chase employee here, the max they match is 5%