The Average 401k Balance By Age and How Much You Should Be Saving NOW | Investing with Chris Naugle
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Have you ever wondered how much your 401k savings compares to what other people of your age are doing? How much should you actually be saving in your 401K? Watch this video to learn how much the average person is saving in their 401K and if it is enough to retire on.
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00:00 How Much You Should Be Saving NOW
00:49 Not many people will be able to retire based on average 401k balance
06:03 How much do you need saved?
08:30 Why do people fail?
10:03 Take advantage of the match
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The material shared in this webinar has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice. You should consult your own tax, legal, investment and accounting advisors before engaging in any transaction….(read more)
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The Average 401k Balance By Age and How Much You Should Be Saving NOW | Investing with Chris Naugle
Planning for retirement has never been more crucial than it is today. With the ever-increasing cost of living and fluctuating economic conditions, it is important to have a solid retirement plan in place to ensure financial stability in our later years. One of the most popular retirement savings vehicles in the United States is the 401k account, offered by many employers. But what is the average 401k balance by age, and how much should you be saving now? Let’s dive into the topic with expert investor Chris Naugle.
The average 401k balance varies greatly depending on age, income, and years of employment. According to recent data from Fidelity Investments, the average 401k balance for individuals in their twenties is around $11,800. This may seem like a significant amount at a young age, but it is important to remember that the earlier you start saving, the better. As individuals age, their average 401k balance increases significantly, with the average balance for those in their thirties reaching roughly $42,400 and in their forties climbing up to approximately $102,700.
However, it is in the fifties and sixties that we see a substantial boost in the average 401k balance. Individuals in their fifties tend to have an average balance of around $174,100, while those in their sixties enjoy a higher average balance of about $195,500. This significant increase can be attributed to several factors, such as increased income, more years of saving, and compounding interest.
But what does this mean for you? According to retirement expert Chris Naugle, it is crucial to take a proactive approach to your retirement savings. “The average 401k balance may give you a general idea, but it should not be the benchmark you use,” says Naugle. “You need to focus on what you want your lifestyle to be like in retirement and work backward from there.”
Naugle recommends saving at least 15% of your income for retirement while considering your age and financial goals. He advises individuals in their twenties and thirties to strive for saving 15-20% of their income, taking advantage of a longer savings horizon. For those in their forties and fifties, a higher savings rate of 20-25% is recommended to catch up on any retirement shortfalls.
While these percentages may seem daunting, Naugle emphasizes the importance of cutting unnecessary expenses and maximizing your contributions. “By prioritizing your retirement savings, you are setting yourself up for financial freedom and peace of mind in your later years,” adds Naugle.
In addition to saving diligently, it is crucial to ensure your investments are aligned with your retirement goals. Naugle highlights the significance of diversification and seeking expert guidance to make informed investment decisions. “Working with a financial advisor who understands your unique circumstances can help you create a retirement plan tailored to your needs,” advises Naugle.
Ultimately, the average 401k balance by age serves as a benchmark for individuals to assess their retirement savings progress. However, it is essential to remember that everyone’s financial situation is unique, and personal goals should guide savings efforts. By saving proactively and seeking expert advice, you can build a solid retirement nest egg that provides financial security and fulfillment in your golden years.
The sad part of this is that I knew back when I was 15 years old I needed to save and invest for retirement. I didn't start until I was 32 years old. I do invest 14% of my money in my 403B account. I am 58 years old now with no plan of retiring any time soon.
I feel kinda vindicated! I've been telling people retirement is a scam and 401ks are garbage for a while. Retirement has been a scam since 1913. Inflation is a tax we don't get to vote on and the politicians will not let social security go bankrupt. They will have the Fed print more money to pay for it. So great job with that one. Here's your fixed death allowance while we deflate it against the market…
But here's an option. Get these 401k plans to supplement and grow them big so we can tax them later while we also deflate your social security. No thanks!
Great video!