How Do Your Retirement Savings Compare to Average 401(k) Balances by Age?
Key Points
The median 401(k) balance is highest in the 55 to 64 age group.
High earners can skew the average 401(k) balances because they contribute much more to plans.
Fidelity recommends having eight times your annual salary saved by age 60.
- The $23,760 Social Security bonus most retirees completely overlook ›
One of the more important financial tasks is saving for retirement. It can be easy to put on the back burner when it's decades away, but the best thing you can do for your retirement savings is to start early and let the power of compound earnings work its magic.
Everyone's retirement needs will vary, but it can sometimes be helpful to know where your savings stand compared to other people in your age group. It shouldn't be taken as gospel, but perspective helps decide if you need to make some changes.
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How 401(k) balances vary by age
Vanguard is one of the largest 401(k) plan administrators, so its reports are often used as the go-to source for 401(k) statistics. According to data from its How America Saves report, here are the average and median 401(k) balances by age groups:
| Age | Average Balance | Median Balance |
|---|---|---|
| Under 25 | $7,259 | $2,234 |
| 25 to 34 | $50,261 | $18,732 |
| 35 to 44 | $120,742 | $46,919 |
| 45 to 54 | $214,991 | $78,730 |
| 55 to 64 | $305,006 | $107,269 |
| 65 and older | $330,186 | $103,202 |
Source: Vanguard.
Median balances are usually a better measure of where someone stands because average balances can be skewed by high earners who contribute a lot to their accounts. The average and median balances for people who earn between $100,000 and $150,000 are both three times higher than those of someone who earns between $50,000 and $75,000.
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Fidelity also produces a similar report, showing balances by generation. Here's how those averages stack up:
| Generation | Average 401(k) Balance |
|---|---|
| Gen-Z (1997 to 2021) | $18,000 |
| Millennials (1981 to 1996) | $82,600 |
| Gen X (1965 to 1980) | $215,600 |
| Baby Boomers (1946 to 1964) | $260,300 |
Source: Fidelity.
How much should you have saved?
It's never too late to begin prioritizing saving for retirement. You don't want to jeopardize your current livelihood trying to save a lot for retirement, but if you can comfortably raise your contributions, you should consider it if you're "falling behind."
At the very minimum, you should contribute as much as your employer will match because it's "free" money, but aiming for double-digit percentages is ideal as you get older. According to Fidelity's milestone guidelines, here's how much of your annual salary you should aim to save by different ages:
- Age 30: 1 times your annual salary
- Age 35: 2 times
- Age 40: 3 times
- Age 45: 4 times
- Age 50: 6 times
- Age 55: 7 times
- Age 60: 8 times
Different people will have different financial needs in retirement, but this is a broad baseline to use to help guide your savings. It doesn't have to only be from a 401(k), either. IRAs are also great savings tools that can perfectly complement your 401(k). And since they're not tied to an employer, anyone earning income can open and fund an account.
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