How Much You Should Have in Your 401(k) – By Age!
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Timestamps:
0:00 – Start Here
0:17 – Ages 18-25
3:09 – Ages 25-34
7:11 – Ages 35-44
8:35 – Ages 45-54
9:45 – Ages 54-64+
~~
Rickie (Editor) ➭
PS: I am not a current Financial Advisor, any investment commentary are my opinions only. Some of the links in this description are affiliate links that I do receive a commission for & they help support the channel!…(read more)
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How Much You Should Have in Your 401(k) – By Age
Planning for retirement is essential, and one of the most common ways people save for their golden years is through a 401(k) plan. A 401(k) is a tax-advantaged retirement account offered by many employers, allowing employees to contribute a portion of their salary towards retirement savings.
However, the amount you should have in your 401(k) can vary depending on your age. Let’s explore some general guidelines to help you evaluate your retirement savings based on your current stage of life.
In your 20s:
When you are just starting your career, retirement may seem like a distant goal. However, this is the perfect time to begin saving for the future due to the power of compounding interest. Financial experts suggest that by your late 20s, you should aim to have at least one year’s worth of salary saved in your 401(k). If you’re unable to reach this milestone, focus on contributing as much as you comfortably can and gradually increase your contributions as your income grows.
In your 30s:
During your 30s, your income typically grows, and you may have more financial responsibilities, such as a mortgage or starting a family. By this stage, it is recommended to have three times your annual salary saved in your 401(k). This might sound like a substantial number, but your increased earning potential should allow you to make significant contributions to your retirement fund.
In your 40s and 50s:
By your 40s, your retirement savings should be a priority. Ideally, you should have six times your annual salary saved by age 45, and eight times your salary by age 50. This is because time is running out, and you have fewer years to take advantage of compound interest. Maximize your contributions and consider catch-up contributions if you are 50 or older. Additionally, review your investment strategy to ensure your savings are growing at a rate that aligns with your retirement goals.
In your 60s and beyond:
As you approach retirement age, it’s important to evaluate your financial readiness. By age 60, you should aim to have ten times your annual salary saved. It’s also crucial to consider factors such as Social Security benefits and any other retirement accounts you may have. Consult with a financial advisor to reassess your investment strategy and make any necessary adjustments to ensure a comfortable retirement.
While these general guidelines provide a helpful framework, it’s important to understand that everyone’s financial situation is unique. Factors such as lifestyle choices, expected expenses, and market conditions can significantly impact your retirement readiness. Consulting with a financial advisor can give you a better understanding of your specific needs and help you create a tailored plan.
In conclusion, saving for retirement is an essential aspect of financial planning. The amount you should have in your 401(k) varies with age, and it’s crucial to ensure you are on track to meet your retirement goals. Start saving as early as possible, maximize your contributions, and make informed investment decisions. With careful planning and consistent saving, you can secure a financially stable and comfortable retirement.
How much is in your 401k or Retirement Balance? Lmk Below!!
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determines a lot of things, my parents both spent same number of years in the medical profession, my mom was investing through a financial advisor while my dad through the 401k. On retirement, my mom retired with about $5million, while my dad retired with roughly $3.8million.
My company is unique in that it doesn't offer a 401(k) match but does put 12% in a cash balance pension at 4% growth. Both traditional and Roth 401(k) options – not bad. Would be nice if they added a company match as we grow!
Great content Humphrey
Your 401k shouldn't be your sole retirement funding so you can't fully use these metrics relative to retirement
Age 39. 401k balance 390k and house paid off in another 3 years. Eligible for a pension at 57.
Sad I didn’t get elevator music!
45-54 age group at a median of $61k is a big gap from the desired 5x. What does their contribution rate need to be at this point in order to get on track for 10x at 65?
Videos like these make me happy about some of the choices I made in my 20s, they make me feel so far ahead, but I feel so far behind in my mind.
"you should" … mighty presumptuous of you
The saving metrics of multiples of salary are not very useful looking at an entire career, since your income changes pretty drastically from age 20-60
I get no match from my employer for a 401k, so that is last on my list of things to put money into. 6% does go into pension. Saving about >20% in IRA/ 457B/Pension/ ETFs.
you forgot the elevator music
This can’t be right. Assuming mortgage is paid off, no longer primary supporting your children and of course no longer contributing to pension then don’t see why you would need 80% of pre retirement income.
I started investing when I was 27, mostly through sweat equity. I just turned 33, and this last month was the first time that my passive income broke $100,000 for the month. This is solid advice! DO IT
my balance hasn't budged since Biden took office…even though I've been putting in almost 200 a week
Excellent video as always but here is my problem I have been making losses trying to make profit trading. I thought trading demo account is just like trading the real market… can anyone help me out or at least advise me on what to do
TRADING CRYPTOS HAS NOT BEEN GOING WELL WITH ME, I HAVE INVESTED A LOT OF TIMES AND FAILED, I TRADE ON MY OWN BUT EACH TIME I KEEP LOOSING MONEY. I DON'T HAVE GOOD STRATEGIES TOWARDS THE MARKET. PLEASE CAN SOMEONE PUT ME THROUGH ON THE RIGHT PATH.
Thankful I have 10% 401k matching. Watching my account grow by 20% of my salary every year is really great for mental health.
What a terrible joke about OceanGate
I don't get this multiples of income business. Your income is not fixed and fluctuates through out your life, it's not a metric worth anything? You don't start on 50k for example and stay there or just fluctuate small amounts. You have kids, you have time off, you have things that both increase and decrease your earning potential and therefore income by so much, I don't understand how I keep seeing/hearing this. Hell I make 2 x what I was making 3 years ago today. Should I use the mean or average since I started working perhaps? it's just a stupid metric to use for anything, aside from deterring your current years income.
Hard to get the average stock market returns in a 401 that only allows investing in funds.
A Financial Planner told me Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. How can one take advantage of compound interest and potentially grow your retirement savings/net-worth to about $3M over time?
So i have about 8yrs to accumulate another 330k to be on track.
Market is rigged. physical gold-silver way ti go imo
I am behide then damn
Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Instead of trying to predict and prognosticate the stability of the market and precisely when the change is going to happen, a better strategy is simply having a portfolio that’s well prepared for any eventually, that’s how some folks' been averaging 150K every 7week these past 4months according to Bloomberg.