401(k) Balance by Age: How Do You Measure Up?

According to Vanguard’s 2024 How America Saves Report, the average 401(k) balance for participants in 2023 was $134,128, with a median balance of $35,286. Vanguard participants’ average account balances increased by 19% since year-end 2022.¹

How does your 401(k) balance compare to others in your age group?  

In this post, we break down the latest data from Vanguard so you have a better idea of how much to save for retirement.

Average vs. Median 401(k) Balances

Before we go through the 401(k) balance by age, it’s important to distinguish between the two sets of figures that will be presented for each age group: average and median.

The average balance is the sum of all the balances divided by the numbers in the set. This means all the different 401(k) balances in that age group are added together and divided by the number of accounts included.

The average 401(k) balance by age group includes adding those who have saved the most and those who have saved the least and dividing this sum.

For example, there are currently more 401(k) millionaires than ever before, but at the same time, “more than half of American workers feel behind on their retirement savings.”²

In contrast, the median 401(k) balance by age represents the middle value, with half of the people in the age group having less and half having more.

When you look at the median 401(k) balance by age, half of the people in that age group have less than this amount saved in their 401(k), and half of those have more.

Here is the 401(k) balance by age group as reported in Vanguard’s 2024 How America Saves Report.³

25 and Younger

This age group is composed of those just starting out in their careers.

• Average 401(k) balance: $7,351
• Median 401(k) balance: $2,816

Ideally, you will start saving for retirement as soon as you enter the career world and are offered an employer-sponsored retirement plan.

26 – 34 Years Old

Those in this age group have had more time to save for retirement. 

Notice that the average is twice the median balance.

This is a clear indication of those who have earned more and saved more in their 401(k) plan.

• Average 401(k) balance: $37,557
• Median 401(k) balance: $14,933

Rather than comparing yourself to these numbers, focus on yourself and your personal retirement goals.

Experts recommend that by age 30, you should have saved the equivalent of one year’s salary. 

What is your salary? Let’s say it is $45,000. Your 401(k) balance by age 30 should be $45,000.

35 – 44 Years Old

During these years, you likely have more financial obligations, such as taking care of your children.

It is tempting to put retirement savings on the back burner to pay for other things during this life season, but you don’t want to give in.

You’ll regret saving less as you approach retirement age and discover you don’t have enough to retire.

• Average 401(k) balance: $91,281
• Median 401(k) balance: $35,537

Experts recommend that by age 40, you should have three times your salary saved up.

Using our previous salary of $45,000, this means you should have $135,000 saved.

45 – 54 Years Old

During this life season, you may be earning more than ever before.

If this is the case, try boosting your 401(k) contributions. Once you hit 50 years of age, you can also take advantage of catch-up contributions of up to $7,500.

This is the time when you should really start focusing on boosting your contributions.

Here is the recent 401(k) balance for this age group.

• Average 401(k) balance: $168,646
• Median 401(k) balance: $60,763

Keep in mind that experts recommend you should have six times your current salary by age 50. 

If you make $45,000 a year, this means your 401(k) balance should be $270,000.

55 – 64 Years Old

The group close to retirement or in retirement should have a 401(k) account that is ready to do the work for them.

Experts recommend that by age 60, you should have eight times your salary. 

For those making $45,000 a year, this means $360,000 in savings.

Let’s look at the current numbers.

• Average 401(k) balance: $244,750
• Median 401(k) balance: $87,571

With $244,750 being the average 401(k) balance, it means that many 401(k) savers have saved significantly more than $244,750.

How Much You Need to Retire

While comparing your 401(k) balance to others is informative, it’s essential to consider your unique needs and the rising cost of living and healthcare expenses.

Fidelity Investments estimates that a 65-year-old retiring in 2023 can expect to spend an average of $157,500 on healthcare and medical expenses throughout retirement, or $315,000 for a couple.⁴

Sadly, many retirees have not saved enough money to last through their retirement years, forcing them to go back to work or rely on aid from others. 

Take a look at the real cost of retirement to see how much you actually need to save.

Speak to a Professional about Catching Up

If you look at these 401(k) balances and are worried about how you measure up, consider seeking the help of a professional. 

They can provide personalized advice tailored to your financial situation, helping to optimize your 401(k) performance so you can catch up and boost your savings.

401(k) Maneuver provides independent, professional account management to help employees, just like you, grow and protect their 401(k) accounts.

Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that are hurting your retirement account performance. 

With 401(k) Maneuver, you can go about your life doing what you love with confidence, knowing we are managing your 401(k) for you.

Be sure to ask for 401(k) Maneuver at work to get personalized help with your 401(k) account

SOURCES

1. https://institutional.vanguard.com/content/dam/inst/iig-transformation/insights/pdf/2024/has/how_america_saves_report_2024.pdf
2. https://www.bankrate.com/retirement/retirement-savings-survey/
3. https://institutional.vanguard.com/content/dam/inst/iig-transformation/insights/pdf/2024/has/how_america_saves_report_2024.pdf
4. https://newsroom.fidelity.com/pressreleases/fidelity–releases-2023-retiree-health-care-cost-estimate–for-the-first-time-in-nearly-a-decade–re/s/b826bf3a-29dc-477c-ad65-3ede88606d1c

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