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One of the best ways to save for retirement is a 401(k). You do not have to pay taxes when you contribute to your account and can defer those taxes until later. Meaning, you can throw more cash into your account to allow compound interest to get to work.
Checking to see the average balance of 401(k) will give you a starting guideline. It is a way to see how you stack up against other people your age.
The Average 401(k) Balance by Age
Two of the largest 401(k) account holders in America, both compiled data from their accounts. The two companies are Vanguard and Fidelity. I have used both to invest in my brokerage account, 401(k), and Roth IRA. They are the cream of the crop when it comes to investment companies.
If you’re into data like me, this sparks your curiosity. I took the guessing out for you and averaged the numbers from both companies. Then we will get into the averages and medians of each company so you can see the difference. Here is the average 401k balance by age:
Average 401k Balance Age 20-29
When you are in your 20s, you have the ultimate advantage when it comes to investing. It is something that older investors dream they could have back. That extremely valuable asset is time.
You have time to allow compound interest to do its thing. To create a snowball of wealth for you and your family. And, allow you to create an income for yourself in retirement.
You are in your investing golden years, and if you can plow away enough cash now, you will plant a seed that can grow into something huge. The choice is yours.
Average 401(k) Balance age 20-29- $8,618
Recommended 401(k) balance by the end of your 20s to be a millionaire is 54,283.72.
Average 401(k) Balance Age 30-39
When you hit your 30s, odds are your career is beginning to accelerate. You no longer are working that entry-level position. You are most likely making more money which means it would be wise to increase your 401k contribution.
Sadly enough, most Americans are not doing this. They seem to be behind, on average, if they want to have a large 401(k) to retire with.
Focus on increasing the amount you contribute to your 401k every raise. You still have decades to allow compound interest to pick up speed.
Average 401(k) balance by age 30-39: $47,500
Recommended 401(k) balance by the end of your 30s to be a millionaire is $242,653.81
Average 401(k) Balance Age 40-49
Once you hit your 40s, your career income is starting to soar. You are making good money, and starting to build a nice nest egg for you are your family.
Even if your salary isn’t exactly where you thought it would be, with some discipline early on you can still have a nice comfortable retirement.
If you’re behind, ramp up your 401(k) savings each a few percentage points per year. If you can swing it, try to max out your 401(k). You still have 20 years to retire, so doing this now will put you in a great position.
The Average 401(k) balance by age 40-49 $99,500
Recommended 401(k) balance by the end of your 30s to be a millionaire is $650,381.56
Average 401(k) Balance Age 50-59
When you hit your 50’s, you can ramp up your 401(k) contributions with what are known as catch up contributions. This means that you can contribute $6,500 more than the max of $19,500, for a total of $26,000.
If you are making a good salary, it would be wise to take advantage of this. It can really help ramp up your savings in retirement. The added bonus is you can defer taxes in your prime earning years.
If you are behind, the time is now to save for retirement. You may have made mistakes in the past by not saving enough. That doesn’t mean you can’t take control over your money now. Draw a line in the sand and commit to having a healthy financial retirement.
The Average 401(k) balance by age 50-59 $166,300
Recommended 401(k) balance by the end of your 50s to be a millionaire is $950,345+
Average 401(k) Balance Age 60 (up to 69)
As you enter your 60’s you are in your retirement years. You want to make sure you maintain your 401(k) in assets that will preserve the wealth you built up. By now, you also want to make sure you have enough saved to live off for 30-40 more years.
Especially, if you are a spry 60. You may even notice that you are yelling at the neighbor kids to “get off my lawn”.
Remember, to preserve your wealth you want to maintain a 3.5% – 4% drawdown. That means you can take $40,000 for every million saved up.
The Average 401(k) balance by age 60-69 $196,300
Recommended 401(k) balance by the end of your 60s to be a millionaire is $1,000,000+
The Average 401(k) Balance By Age According to Fidelity
Fidelity announced that 401(k) balances reached records highs. This is due to the surging stock market during that time in addition to a great economy. In fact, in the last decade, assets nearly doubled. This is what you want to see as an investor. Watching compound interest work it’s magic.
The following are the average and median balances of over 22,000 businesses employee benefit programs under Fidelity’s management.
These metrics will show you how lousy Americans are at saving. If your 401k is your primary retirement plan, and you are below these numbers, try to increase your savings by 1% every other month. This will allow you to ramp up your savings over time.
Ages 20-29
Average 401(k) balance: $13,200
Median 401(k) balance: $5,000
Ages 30-39
Average 401(k) balance: $46,200
Median 401(k) balance: $18,500
Ages 40-49
Average 401(k) balance: $111,100
Median 401(k) balance: $39,200
Ages 50-59
Average 401(k) balance: $188,000
Median 401(k) balance: $65,300
Ages 60-69
Average 401(k) balance: $212,600
Median 401(k) balance: $67,600
| Fidelity Average 401K Balance By Age | ||
| Age | Average 401(k) balance | Median 401(k) balance |
| 20 to 29 | $13,200 | $5,000 |
| 30 to 39 | $46,200 | $18,500 |
| 40 to 49 | $111,100 | $39,200 |
| 50 to 59 | $188,000 | $65,300 |
| 60 to 69 | $212,600 | $67,600 |
The Average 401(k) Balance By Age According to Vanguard
Vanguard is one of the largest retirement account holders in the country. They also carry some of the best funds for the 401(k) including VTSAX.
Surprisingly, they have lower metrics than fidelity.
Here are the results from their study of 401(k) balances by age.
| Vanguard Average 401K Balance By Age | ||
| Age | Average 401(k) balance | Median 401(k) balance |
| Under 25 | $4,236 | $1,427 |
| 25 to 34 | $21,970 | $8,126 |
| 35 to 44 | $61,238 | $22,123 |
| 45 to 54 | $115,497 | $40,243 |
| 55 to 64 | $171,623 | $61,738 |
| 65 and up | $192,887 | $58,035 |
Under 25
Average 401(K) balance: $4,236
Median 401(K) balance: $1,427
Age 25-34
Average 401(K) balance: $21,970
Median 401(K) balance: $8,126
Age 35-44
Average 401(K) balance: $61,238
Median 401(K) balance: $22,123
Age 45-54
Average 401(K) balance: $115,497
Median 401(K) balance: $40,243
Age 55-64
Average 401(K) balance: $171,263
Median 401(K) balance: $61,738
Age 65 and up
Average 401(K) balance: 192,887
Median 401(K) balance: 58,035
How Do These Numbers Help Me?
For the most part, they are just a guide. These averages are too low to target if you want to become a 401(k) millionaire. Or, if you want to use your 401(k) as your retirement vehicle.
You need to aim to save more of your income. Try to save 20% or more for as long as possible. Then you will be sure you have a secure retirement.
Andrew is the host of The Personal Finance Podcast, a show that is changing the way you think about your money. His primary goal with the podcast is to bring as much value as possible to his listeners.
Andrew's favorite free financial tool he's been using since 2014 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments and ensure that he's on the fast track to financial freedom.
His favorite investment platform is M1 Finance, a site that allows him to build a custom portfolio of stocks for free. It has no trading fees and is his preferred way to invest without having to lift a finger.
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