The Average 401(k) Retirement Savings Balance for Americans 45 to 54 May Surprise You

Key Points

• It's important to save well for your senior years.

• Your mid-40s to mid-50s are a good time to assess your nest egg and make sure you're happy with it.

• If not, there are steps you can take to catch up.

• The $23,760 Social Security bonus most retirees completely overlook ›

Working Americans are often told that their living costs should shrink to some degree in retirement. But that doesn't mean it isn't important to save.

Although many retirees have Social Security to fall back on, if you earn a typical wage, those benefits will only replace about 40% of your paycheck. And most seniors need a lot more income than that to live comfortably, so you shouldn't plan to retire on those benefits alone.

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Of course, saving for retirement isn't easy -- especially in this day and age. Rampant inflation has eaten into a lot of people's budgets, making to harder to prioritize retirement plan contributions when there are rising bills to pay.

Still, it's important to make an effort to save as well as possible for retirement. And recent data from Vanguard shows that workers in their mid-40s to mid-50s may have some work to do.

What the average American aged 45 to 54 has in a 401(k)

Every year, Vanguard compiles 401(k) savings data based on its records. And one thing it did in this year's report is break down average 401(k) plan balances by age.

The average 401(k) balance among 45- to 54-year-olds was $188,643 as of the end of 2024, while the median balance was $67,796. And that difference is significant, because when a median in a given data set is a lot lower than the average, it tends to indicate that the median is a more representative number.

Think about it. If a small percentage of people in their mid-40s to mid-50s with gigantic 401(k) balances were factored into Vanguard's data, it's easy enough for the average balance for that age group to get skewed upward.

What this means is that $67,796 more likely represents what the typical 45- to 54-year-old has saved in a Vanguard 401(k) plan. And that number is a bit discouraging, particularly for workers on the older end of that spectrum.

People in their mid-40s are generally midway through their careers, so they have a fair amount of time to catch up. People in their mid-50s typically have a lot less time.

In fact, for anyone born in 1960 or later, full retirement age for Social Security is 67. Someone who's 54 with $67,796 in their 401(k) may only have 13 more years to build upon that balance. That's some time, but not a whole lot.

How to catch up on retirement savings

If you're between ages 45 and 54 and aren't happy with where your 401(k) stands today, it's important to take steps to do something about it. To that end:

• Aim to snag your full employer 401(k) match if your company offers one.
• Try saving your raise every year -- if not completely, then partially.
• Work a side job for extra income.
• Make sure your 401(k) is invested strategically so you aren't losing money to high fees.

Having $67,796 in a 401(k) is far better than having no money at all, which is no doubt the case for a good number of people in their mid-40s to mid-50s. But that doesn't mean you shouldn't try to boost that balance significantly between now and retirement.

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