What’s the average 401(k) balance by age? (2024)

The amount of money you’ll need to retire comfortably depends on several factors, such as where you plan to live and how much you plan to spend. But experts say it’s important to save for the future now — especially because one of the main advantages of 401(k) workplace retirement plans is that your money benefits from compound returns, growing via the financial markets over time.

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What’s the average 401(k) balance by age? (1)

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“The sooner 401(k) participants start to save, the more realistic their retirement goals will become,” said Marshall Nelson, wealth advisor at Crewe Advisors.

To make sure you’re on track to a secure and enjoyable retirement, it can be helpful to see how your savings stack up to the average 401(k) balance by age.

How much should you save for retirement?

The amount of money you should have saved for retirement at a given age will be different for every person, depending on their unique financial situation, time horizon and goals, said Carla Adams, a financial advisor and founder of Ametrine Wealth. For example, someone with a pension will need a different amount of money in their 401(k) than someone without a pension. One person may want to retire at age 65, while another wants to retire earlier.

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.

“If you’ve recently had a major increase in pay, you may be a bit behind these guidelines and that’s OK,” Adams said. “Give yourself a few years to catch up.”

The amount of money you should stash away regularly for your retirement will also depend on factors like when you want to retire —since working later means you’ll have fewer retirement years to cover, more time for investments to grow and the possibility for higher Social Security payments —and what you expect your lifestyle to look like in retirement.

Fidelity goes on to explain that someone who plans to delay their retirement until age 70 may need to save eight times their income to maintain the same lifestyle in retirement, while someone who wants to retire closer to age 65 may need to save as much as 12 times their income. Of course, someone planning to live frugally and sell their home to buy a smaller condo will need to save less than someone expecting to take expensive vacations.

Fidelity has a retirement savings tool you can use to calculate how much you should save for retirement based on your current age, expected retirement age and expected retirement lifestyle (Choose “average” if you think you’ll spend the same amount of money now as you do when you retire, “below average” if you think you’ll spend 15% less or “above average” if you think you’ll spend 15% more).

For example, someone who is currently 30 years old who plans to retire at age 67 and has an average retirement lifestyle is on track if they have around the equivalent of their salary saved now, according to the tool. They’ll want to up that to four times their salary by the time they’re age 45 and eight times their salary when they hit age 60.

Tips for retirement savings

When it comes to saving for retirement, putting money away early and often is one of the best ways to help to reach your goal. Here are some tips to help you:

Save at least enough to get an employer match

If your employer offers a retirement savings account like a 401(k), contributing some of each paycheck is a great way to save —especially if your employer matches your contributions. That’s essentially free money from your employer set aside for your retirement.

Use tax-advantaged retirement accounts

Individual retirement accounts (IRAs), including both traditional and Roth IRAs, also come with tax breaks. You can contribute up to a combined total of $7,000 between these accounts in 2024 if you’re under age 50, according to the IRS. You can also consider a health savings account (HSA), which is a tax-advantaged way to save for health care expenses. It often makes sense to save with one or more of these vehicles alongside an employer-sponsored account.

Take advantage of catch-up contributions

If you’re age 50 or older, you’re allowed to contribute what are called “catch-up” contributions to your 401(k) and IRAs. In 2024, you can put away an extra $7,500 in a 401(k) and similar accounts and an extra $1,000 in IRAs.

Automate your savings

If you are contributing part of your paycheck to a retirement savings plan through your employer, you’re already doing this. But if you’re not, automating your savings can help you stick to your goals because it doesn’t require you to constantly remember to transfer funds to your retirement accounts.

Average and median 401(k) balances by age

Vanguard, which like Fidelity is one of the top 401(k) providers in the United States, releases an annual report detailing the savings behavior of participants in its defined contribution plans, including 401(k)s.

The company’s “How America Saves 2023” report provides data on the average and median 401(k) account balances by age, among other insights.

The firm found the following:

Age rangeAverage balanceMedian balance

<25

$5,236

$1,948

25-34

$30,017

$11,357

35-44

$76,354

$28,318

45-54

$142,069

$48,301

55-64

$207,874

$71,168

65+

$232,710

$70,620

Source: Vanguard, How America Saves 2023

Average and median 401(k) balances by job tenure

As you move through your career and, ideally, bump up your income, the amount of money you contribute to your 401(k) should increase, too. Adams recommended trying to increase your retirement contributions by 1% each year until you hit 15%.

“The longer an employee’s tenure with a firm, the more likely they are to earn a higher salary, participate in the plan, and contribute at higher levels,” according to Vanguard. “Longer-tenured participants also have higher balances because they have been contributing to their employer’s plan for a longer period.”

And the data bear this out:

Job tenure (years)Average balanceMedian balance

0-1

$14,341

$3,441

2-3

$35,780

$14,739

4-6

$61,842

$30,404

7-9

$97,416

$52,992

10+

$247,170

$124,300

Source: Vanguard, How America Saves 2023

Average 401(k) contribution rates

The amount of money you should contribute to your 401(k) each year depends on your specific financial situation and goals. Ideally, you should contribute at least 10% to 15% of your pay towards retirement accounts, including what your employer contributes on your behalf, starting at age 25, Adams said.

Because of factors like student loans, you may not be able to save that much early on, meaning you may have to contribute more than 15% later in life, Adams said.

But the average total contribution rate, including both participants’ and employers’ contributions, in 2022 was just 11.3%, according to Vanguard’s data. The median was 10.6%.

Here again, these figures vary by age and job tenure:

Age rangeCombined participant and employer contribution rates

<25

8.1%

25-34

10.7%

35-44

11.1%

45-54

11.7%

55-64

12.9%

65+

12.7%

Source: Vanguard, How America Saves 2023

Job tenure (years)Combined participant and employer contribution rates

0-1

8.4%

2-3

11.2%

4-6

11.9%

7-9

12.3%

10+

12.9%

Source: Vanguard, How America Saves 2023

Average 401(k) match

In addition to what you contribute to a 401(k), you’ll typically get a match from your employer as well. For example, if you contribute 3% and your employer matches up to 3%, you’ll double your contribution. (If you contribute 10% but your employer only matches up to 3%, you’ll still just get the 3% contribution from your employer.)

“It’s so important to take advantage of employer matches and to try to contribute at least enough to get the maximum employer match,” Adams said. “Otherwise you are leaving free money on the table.”

The amount that a company will match varies by company, so she recommended speaking with your human resources department or reading the fine print of your benefits package when you accept a new job to determine exactly what the percentage is.

“The most common 401(k) match formula on plans at Fidelity is a dollar-for-dollar match on the first 3% and then 50 cents on the dollar on the next 2%,” according to the firm. The overall average employer contribution is 4.8%, Fidelity found.

But the average amount that employers put in per employee, including non-matching (profit-sharing) contributions, also varies by age:

Age rangeCombined participant and employer contribution rates

20–29

4.0%

30–39

4.6%

40–49

5.0%

50–59

5.2%

60–69

5.2%

70+

4.7%

Source: Fidelity, Building Financial Futures, Q1 2023

“Employer matches make it much easier for you to hit the 10%-15% ideal savings amount,” Adams said. “For example, if your employer matches up to 3% and you’re contributing 7%, then you’re already at the minimum 10% goal.”

What is a 401(k)?

A 401(k) is an employer-sponsored retirement savings account that companies often offer as part of a benefits package.

These retirement savings accounts come with a big tax advantage. Money that you invest into traditional 401(k)s is pre-tax, meaning that the money grows tax-deferred until you take it out in retirement, at which point you have to pay taxes on those withdrawals. Roth 401(k)s work oppositely: You fund the account with after-tax dollars and make withdrawals tax-free.

There are contribution limits for 401(k)s, which are $23,000 in 2024, up from $22,500 in 2023, plus an additional $7,500 “catch-up” contribution if you’re over age 50.

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What’s the average 401(k) balance by age? (2)

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What happens when you’re behind on 401(k) contributions?

Putting money into a 401(k) isn’t the same as putting it into a savings account. Money in a 401(k) is invested in the financial markets, meaning your balance has the potential to grow over time.

But the more contributions you add, the more capital gains, dividends and interest on those contributions can compound, and the more you’ll have to live comfortably off of in your golden years. If you fall behind on your contributions, you’re missing out on the potential for those dollars you could have invested to generate higher returns over the long term.

How much do you need to retire?

The amount you need to retire depends on your personal situation, including where you plan to live in retirement, your lifestyle and your sources of income outside of your 401(k). However, one widely accepted guideline is that you’ll need around 80% of your pre-retirement income in retirement.

Meanwhile, according to an August 2023 survey from financial services firm Charles Schwab of 1,000 401(k) plan participants in the US: “Workers now believe they’ll need to save an average of $1.8 million for retirement, compared to $1.7 million last year.”

Frequently asked questions (FAQs)

The average 401(k) balance of someone between ages 25 and 34 is $30,017, and for someone between ages 35 and 44, it’s $76,354, according to data from Vanguard.

Your job tenure, income, contribution rate and employer match can all influence your 401(k) balance at each age.

Your job tenure can affect your 401(k) balance because if you’ve worked for longer, you’re likely to have experienced more raises, allowing you to increase your contribution rate. It also means your money has been invested for longer, increasing its chances to earn long-term returns.

What’s the average 401(k) balance by age? (2024)

FAQs

What’s the average 401(k) balance by age? ›

By age 40, you should have three times your annual salary already saved. By age 50, you should have six times your salary in an account. By age 60, you should have eight times your salary working for you. By age 67, your total savings total goal is 10 times the amount of your current annual salary.

What is a good 401k balance by age? ›

By age 40, you should have three times your annual salary already saved. By age 50, you should have six times your salary in an account. By age 60, you should have eight times your salary working for you. By age 67, your total savings total goal is 10 times the amount of your current annual salary.

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.

How many people have $1,000,000 in retirement savings? ›

According to the Federal Reserve's latest Survey of Consumer Finances, only about 10% of American retirees have managed to save $1 million or more. This leaves a significant 90% who fall short of this milestone. Don't Miss: The average American couple has saved this much money for retirement — How do you compare?

At what age should you have 100K in your 401k? ›

Kevin O'Leary: By Age 33, You Should Have $100K in Savings — How To Get Started. If you're just starting out in your career, $100,000 might seem like a lot of money. After all, the median salary of a 20- to 24-year-old, according to Bureau of Labor Statistics data, is just $37,024.

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.

What is the 80 20 rule for 401k? ›

Put 80% of your money into retirement accounts like 401ks or IRAs, and 20% in high-yield investments. Invest 80% of your money in passive index funds or ETFs and the remaining 20% in real estate. Put 80% of your money into blue-chip stocks and 20% in bonds or small and midsized companies.

What is considered wealthy in retirement? ›

To be considered wealthy at age 65 or older, you need a household net worth of $3.2 million, according to finance expert Geoffrey Schmidt, CPA, who used data from the 2019 Survey of Consumer Finances (SCF) to determine the household net worth needed at age 65 or older to determine the various percentiles of wealth in ...

What does the average American retire with? ›

Data from the Federal Reserve's most recent Survey of Consumer Finances (2022) indicates the median retirement savings account balance for all U.S. families stands at $87,000.

What is a good net worth to retire? ›

Typical Net Worth at Retirement
Age RangeMedian Net WorthAverage Net Worth
55-64$212,500$1,175,900
65-74$266,400$1,217,700
75+$254,800$977,600
Oct 5, 2023

Is 200k in 401k at 40 good? ›

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.

How many 401k millionaires are there? ›

The universe of 401(k) accounts with balances of $1 million or more at Fidelity Investments rose to a record 485,000 in the first quarter, according to the company. With stocks surging, the number of retirement account millionaires jumped 15% from the prior quarter and 43% since March 2023.

What percentage of retirees have $2 million dollars? ›

According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.

Is 6% for 401k good? ›

Many plans require a 6% deferral to get the full match, and many savers stop there. That may be enough for those who expect to have other resources. For most people, though, it probably won't be. If you start early enough, given the time your money has to grow.

How aggressive should my 401k be at 50? ›

Now, most financial advisors recommend that you have between five and six times your annual income in a 401(k) account or other retirement savings account by age 50. With continued growth over the rest of your working career, this amount should generally let you have enough in savings to retire comfortably by age 65.

What's considered a good 401k? ›

Many employers match as much as 50 cents on the dollar, on up to 6% of your salary. Most advisors recommend contributing enough to get the maximum match. Turning down free money doesn't make sense unless the fund is so bad that you're losing most of it to fees and substandard returns.

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