Here's the Average 401(k) Balance by Age. How Does Yours Compare?
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If you want financial security in retirement, it's up to you to invest to make that happen. Social Security will provide you with some income, but probably not enough to comfortably live on since only about 40% of your pre-retirement income will be replaced by your retirement benefits.
A 401(k) is often an easy account to use for retirement savings. If your employer offers one, you can sign up at work and don't have to worry about opening a brokerage account on your own. If you're lucky, your company will match some of your contributions. Plus, you can have money withdrawn automatically from your paycheck to go into your 401(k).
Not everyone is putting a lot of cash into their 401(k), though, despite the benefits this account offers. Let's take a look at average 401(k) balances by age so you can see how much the typical American has invested -- and how your own account compares.
The average 401(k) balance by age
According to data from Vanguard's "How America Saves 2024" report, here's how much money Americans within different age groups have in their 401(k) plans
Age | Average 401(k) balance | Median 401(k) balance |
|---|---|---|
Under 25 | $7,351 | $2,816 |
25 to 34 | $37,557 | $14,933 |
35 to 44 | $91,281 | $35,537 |
45 to 54 | $168,646 | $60,763 |
55 to 64 | $244,750 | $87,571 |
65 and over | $272,588 | $88,488 |
Data source: How America Saves Report 2024, table by author.
People grow their balances as they get older. They have more time to invest, retirement becomes a more realistic prospect rather than just a future goal, and they have more time to earn returns that help increase their balance.
However, even older Americans probably don't have enough savings based on these average balances. An account with $272,588 in it would still produce only around $10,903 in annual retirement income -- assuming you followed the 4% rule.
That's a common rule of thumb that says your money can likely support you for 30 years without running out if you withdraw 4% in your first year of retirement and make annual adjustments for inflation.
It's also worth noting that median balances are a lot lower than average since some people with huge 401(k) plans drive up the overall average.
How does your 401(k) compare?
Since most Americans probably don't have enough saved in a 401(k), hopefully you'll look at these numbers and see that your balance is above average for your age group. However, the key is to make sure you have enough invested to personally accomplish your own goals.
You'll likely want to replace at least 40% of pre-retirement income with the distributions your 401(k) provides. That money can combine with Social Security to replace 80% of what you earned while working. This should help you maintain your standard of living.
You can -- and should -- use the calculators at Investor.gov to see if you're on track to accomplish this goal, given your current savings rate. If you fall short, increase your 401(k) contributions or, if you don't have a workplace 401(k), start moving money from savings into an IRA to help you build a better retirement.
The younger you are when you start seriously saving for retirement, the better off you'll be.
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