Average 401(k) balance by age

Saving for retirement isn't easy, but 401(k)accounts are a universally popular way to save thanks to hands-off investing features and contributions drawn directly from your paycheck.

But how do you know if you've saved enough? How is your retirement savings plan shaping up against people your same age?

Here's the Data:

Average 401(k)balance up to age 25: $4,048 Median: $1,385

Average 401(k)balance ages 25-34: $22,187 Median: $8,363

Average 401(k)balance ages 35-44: $60,528 Median: $23,944

Average 401(k)balance ages 45-54: $116,192 Median: $46,200

Average 401(k)balance by ages 55-64: $177,805 Median: $71,579

Average 401(k)balance by age 65+: $200,358 Median: $68,558

All workers: Average savings of $96,288 Median: $26,405

(Median is the middle point, so half the savers would be above and half below)

Source: “How America Saves” a 2016 report by Vanguard. Balances are from Vanguard defined contribution programs. A 401(k) is a defined contribution (DC) plan.

On average, most experts advise that you will need to save enough to replace 80% of your current income for the length of your retirement.

Related content: What your 401(k) is costing you

Some economists believe the 401(k) itself is failing U.S. workers. In this 2016 report by the Economic Policy Institutecalled “The State of American Retirement” participation declined “even as baby boomers have approached retirement.”

Share of families age 32—61 participating in retirement plans by type, 1989—2013

    
        
 Defined-benefit planDefined-contribution planBoth types of plansAny plan   
198941%35%17%58%   
199233%35%13%54%   
199528%41%12%56%   
199826%46%13%59%   
200128%47%15%60%   
200425%44%11%57%   
200725%47%14%57%   
201022%42%11%53%   
201321%43%11%53%   
        
Accompanying note from EPI: “Since DC and DB shares include families with both kinds of plans, the share with both types is subtracted from the total to produce the share with any plan. Sharesindicate whether either the respondent or his or her spouse participated in such a plan or plans on a current job (individual participation rates are lower).”
Source: EPI analysis of Survey of Consumer Finance data, 2013.   

Am I Saving Enough in My 401(k)?

The contribution limit to a 401(k) or its alphanumeric cousins — e.g. the 403(b) — increased $500 to $18,000 for 2015 and 2016. The catch-up contribution for those age 50 and up also increased $500, to $6,000. Estimates for 2017 suggest these figures will stay the same, though it won't be announced by the IRS until October 2016.

But don't these limits stop you from socking away more money. Data from Fidelity shows that investors who have both a 401(k)and anIRA retirement account have an average total of around $250,000 saved, more than those with a 401(k) alone.

Related content: How to open a Roth IRA

Are There Downsides to 401(k)s?

Here's one of the shortcomings of the 401(k) system when it comes to investing in stocks: During tough economic times, many people lose their jobs, the still-working see their salaries get frozen or cut, and many companies eliminate the match. On the whole, money going into retirement accounts declines.

But this is also when the stock market declines, which means it could be a better time to be buying stocks. Historically, the broad market — as measured by the Dow or the S&P 500 — has recovered from declines. In the teeth of the Great Recession, the S&P 500 fell as low as 666 (spooky!). Unfortunately, many Americans didn't have the resources to buy companies (which is what you're doing when you buy stocks) at much lower prices, and workers got less help from employers. Money flowing into 401(k)s increases as the economy improves but also when the stock market has already begun to rebound, making stocks more expensive to purchase.

There may also be situations where a company no longer provide matching funds, long a major draw for 401(k) savers — free money! — but among those that do continue to match, it might be getting better for the saver:

The2015 Trends & Experience in DC Plans Report from Aon Consulting surveyed 360 employers with over 10 million employees. Here's what they found:

-42 percent of companies now match dollar-for-dollar, up from 31 percent in 2013.

– 56 percent require workers to save 6 percent to earn the match.

Most adults will confront the thought — am I saving enough? — at some point, no matter their age, so it's important to focus on the fundamentals and not to panic. Even if you are behind, all experts will tell you even starting small is the right thing to do.

Robert Brokamp, a certified financial planner, contributed to this article.

More about...Retirement, Investing

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Beth
Beth
5 years ago

Happy to hear you’re sticking around, Robert! One thing that bugs me about reports like these is that they encourage the kind of thinking that you can understand people’s retirement situation from one piece of the puzzle. It’s easy to sit back and say “oh wow, I’m better off than most people!” — but i don’t think it’s accurate. In Canada, reports about RRSP contributions come out of the woodwork in the months before the the contribution deadline, and, you guessed it, they’re published by banks and companies that profit from the scare factor. What the reports don’t reveal is… Read more »

nicoleandmaggie
nicoleandmaggie
5 years ago

How many people have accounts across different providers? (For example, we have Fidelity, Vanguard, and etrade and DH has a new account from some expensive little firm with his new employer, and I’ve still got Ing (now Voya) because although they let DH switch his account to Fidelity they kept not switching mine even with the exact same paperwork.)

Beth
Beth
5 years ago

Ha! Good point. I do too — different financial institutions, and different investment vehicles.

If there are a lot of people like us, then we’re certainly skewing the results!

sarah
sarah
5 years ago

I have an IRA at Fidelity while my husband’s is at Vanguard, and my 403b from work is through another company entirely.

Ray
Ray
5 years ago

If you really have multiple 401(k)s in multiple brokerages, I would consider rolling over the ones you can (that is, the ones not associated to your current job) into an IRA. The fees and investment choices in an IRA will be much more advantageous than the 401(k). I have the bulk of my retirement money in the 401(k) associated to my current employment and I wish I could roll that money over into an IRA. But the only way would be if my employment were terminated (one way or the other). It’s like a punishment for staying in the same… Read more »

nicoleandmaggie
nicoleandmaggie
5 years ago
Reply to  Ray

Yes, that’s true. But my two 401(K) plans are with my employer and my Etrade and Vanguard accounts are already IRAs. My husband has it on his to-do list to move his Fidelity 403b to his Vanguard IRA but he hasn’t done it yet.

Mike
Mike
5 years ago
Reply to  Ray

Their are advantages in not rolling 401ks as well, particularly if its a good one. Having IRAs can really mess up doing Roth IRAs from a tax standpoint also 401ks have higher level of protection than IRAS

nicoleandmaggie
nicoleandmaggie
5 years ago
Reply to  Mike

That’s also a really good point. All our IRAs are currently Roths (we converted when it was first allowed), but if we ever wanted to do a backdoor Roth, we wouldn’t want traditional IRAs increasing our tax liability. Something really high earners have to worry about.

Lori
Lori
5 years ago
Reply to  Ray

I’ve worked for several companies that handle 401(k), 457, 403(b) and IRA plans. Fees are so subjective as they are negotiated by the employer versus the company handling the account. Oftentimes, your (ex)employer may still be paying those fees – three of my past jobs still do so I’ve left them alone. If your plan has awful fund choices or does charge high fees, then of course you should move but definitely look at what you have now. I’ve often seen where a financial advisor will encourage people to move to an IRA but in reality they’re subjecting their clients… Read more »

FLSmooth
FLSmooth
5 years ago

To nicoleandmaggie (comment #2), may I suggest you not have so many accounts. The more accounts you have the more dilute your potential earnings. May I suggest no more than 2 accounts.

Emily @ Simple Cheap Mom
Emily @ Simple Cheap Mom
5 years ago

I enjoy reading these reports. As the other commenters have said, it doesn’t paint the full picture, but it does give a general idea of how a group of people are using their retirement funds. I know it doesn’t matter, but I’m still interested, sorry!

SavvyFinancialLatina
SavvyFinancialLatina
5 years ago

Sometimes I do wonder how much people are saving in their retirement accounts. I so want to peek at their contribution amount just for curiosity. I did mention to a coworker that the contribution amount had been bumped to $18K and that it would be a good idea to relook at his contribution in 2015. He responded with a phased look and said,”oh there’s a limit? I thought it was just based off a percentage of your salary?” Facepalm. This is an attorney. You think your education by degrees would correlate with how you treat your finances. Right?? Am I… Read more »

sarah
sarah
5 years ago

I don’t think most people get anywhere near the limit, so wouldn’t need to consider it. For most of my working life, 18k would have been about 50% of my salary, so the limit is not something I’ve ever thought about.

Alea
Alea
5 years ago

Ha! When one of my co-workers turned 50 I pointed out that he can now contribute more to his 401(k)! His response: “Stop reading all those investment books.” It was in good fun of course, but I think his retirement plans rests on his five kids taking care of him. When I started contributing to my 401(k) I never thought that just 10% of my contributions will set me for life, as I was earning $40k a year which amounted to $4k in savings, and I also started late. I am proud to say that next year I will be… Read more »

mysticaltyger
mysticaltyger
5 years ago

It’s been well documented that doctors and lawyers, as a group, are notoriously bad at managing money. Being smart in an IQ sense is also not all that well correlated to being good at managing money…so I am not surprised by your post.

I have also noticed it always seems to be the engineers who are the best savers of any of the profession and the personal finance blogosphere is dominated by engineers. I don’t think that’s a coincidence.

Marcus
Marcus
5 years ago
Reply to  mysticaltyger

It does seem like Engineers manage their money well! An even better combination (IMO) is an engineer and a teacher! That would describe me and my sweetie. We’re both in our early 50s have sent 2 kids to private university, one kid is in the banking industry and the other is in his second year (out of 3) of Physcial Therapy grad school on his way to become a Physcial Therapist. We’ve had our ups and downs but have been able to do a lot of things with our lives practicing a lot of what I read on GRS. Debt… Read more »

Beth
Beth
5 years ago
Reply to  mysticaltyger

I suspect the personal finance blogosphere is also dominated by engineers because they’re relatively high earners and therefore better able to live well below their income, retire early, become entrepreneurs, etc. 😉 That plus a strong math skill set is a killer combination.

I don’t mean that as a criticism — I think it’s great. I also love how they share their knowledge so more of us can benefit.

Mike
Mike
5 years ago
Reply to  Beth

My brother in-law is a super smart engineer who thinks the world is going to hell in a hand basket and cashed his 401k at 49 to buy 2 porsches.

Old Guy
Old Guy
5 years ago

I find the stats discouraging. Even factoring in those with multiple accounts, there’s not near enough saving going on. Plus I have a double decker busload of relatives to provide some empirical evidence. I only care what other people have in their accounts as it translates into them expecting me to bail them out. I have quit saying anything about money to pretty much anyone because the pressure to get into my pockets is intense. “Let Old Guy pay for lunch.” “Ask Old Guy for the money to keep your water from getting cut off.” “Ask Old Guy…” I’m a… Read more »

CIWOOD
CIWOOD
5 years ago
Reply to  Old Guy

I agree Old Guy.
Only one of my relatives and friends are preparing properly for lean times. I crossed the million mark two years ago(no Pension and WEP reduced social security) and I am still concerned about living 30 years on 4%. It amazes me that so few people I am in contact with are not in panic mode. I know many articles say the public is not in trouble but I am convinced that greater than 90% of everyone is going to regret their saving and investment habits. And come for my money!

Kat
Kat
5 years ago
Reply to  Old Guy

Sorry to hear that, Old Guy. I think it speaks poorly of the character of these people if they feel it’s okay to take advantage of you just because you’ve been diligent with your saving. I know from experience, because I have aunts who will try to flat-out swindle me whenever they get wind that I got a raise or bought a new (used) car. “Oh, that must mean Kat has money.” I once had an aunt ask me for $100 to help pay for Grandma’s dental work, only to find out from Grandma that she didn’t need any dental… Read more »

Marsha
Marsha
5 years ago
Reply to  Old Guy

I hear you, Old Guy. I’m more Middle Age Girl now, but I’ve got relatives like yours. One of my older relatives had a high-paying job for years, but when she lost her job and couldn’t find one similar, she ended up losing her house within a few months. She didn’t have a red cent in emergency or retirement funds. But she did have a large mortgage and an expensive lifestyle. She had frequently made fun of my penny-pinching ways, but guess who she asked for help when the bad times came? I’m also concerned that other people my age… Read more »

Chuckie G.
Chuckie G.
5 years ago
Reply to  Old Guy

Opting to say nothing about finances to your own children is ridiculous. Assuming we’re talking about withholding opinions on building and managing wealth and not just withholding information on dollar values, what is there to lose by sharing such insight with your own children? Are you so paralyzed with fear that they might get the wrong idea and come begging that you’d rather not share your knowledge with your own kids; the very people whose character you built and moral compass you calibrated?

Old Guy
Old Guy
5 years ago
Reply to  Chuckie G.

I should have said MY finances. I do everything possible to pass on the wisdom.

Crystal
Crystal
5 years ago

I enjoy ready this information also, but like others said it doesn’t paint full pictures. I’m OK with that.

I would really like to know how much money I should have saved for retirement at this point. I know there are many variables that affect this number, but is there a ball park figure?

CIWOOD
CIWOOD
5 years ago

I found this from an old Fidelity research article. As a rule of thumb, it may serve you if you are not into a deeper, more accurate assessment from calculators like
http://dinkytown.net/java/RetirementPlan.html

Savings Target as Multiple of Current Income Fidelity
Age (retire @ 67)
25 0x
30 .5x
35 1x
40 2x
45 3x
50 4x
55 5x
60 6x
65 7x
67 8x
Retirement target 85% of current income

Jen
Jen
5 years ago

Great post! And even if you don’t lose your job during a recession, and even if you KNOW you should be buying up stocks on discount while the market is down, if your job is at all precarious, your instinct is to stockpile cash, just in case. Looking back at the Great Recession, I wish I would have poured in much more cash into stocks while the opportunity presented itself(I held steady and kept contributing but didn’t increase), but at that moment in time I didn’t know if we would would lose our jobs and if so, how long it… Read more »

Dianecy
Dianecy
5 years ago

Great article Mr. Brokamp! Add me to the league of readers who are glad you’re back.
My quibble is not with you, sir, it’s with the editors. What the heck is up with that headline? We’re all about learning that keeping up with the Joneses is a losing proposition in the journey to Get Rich Slowly, except when it comes to investments? Surely you can do better than that!

RNR
RNR
5 years ago

These things used to depress me.
Now they encourage me.
The trick is to get going, and contribute till it pinches.
Let it ride in a low-cost index fund through good times and bad.
Today? 500k, and maxed out, and still more than a decade to go before retirement.
Never thought I would get here.
You have to remember:
Someone will always have more.
Someone will always have less.
Your job is to save for yourself.
Not them. 🙂

BrentABQ
BrentABQ
5 years ago

I don’t think we can actually learn much from these stats. I know I have a 401K, Rollover IRA, Roth IRA and Taxable accounts between Fidelity and Vanguard. Looking at any 1 account is going to be very far from the whole picture. 401Ks are generally only kept while at the employer.

Matt
Matt
5 years ago

I just want to point out that Roth 401(k)s skew the balance by a pretty good margin. I contribute to my 401(k) with Roth contributions and get matched in traditional funds. Because of this, my balance is 152-20% lower than it would be in a traditional 401(k).

It might make for a good column for someone to break down Roth vs traditional 401(k) options. I know I run the numbers every year during open enrollment.

Mrs PoP
Mrs PoP
5 years ago

Your 401K probably also issues an annual report – ours does and it gets emailed out every year to all employees – so you can use it to get a glimpse into what the Average Jones at your company has saved in their 401K, too.

Ours annual report just lists total assets and number of people, without breakdowns by age, but it’s still interesting that I passed the average balance in my employer’s 401K plan after I had been saving in my 401K for a little under 5 years!

beep
beep
5 years ago
Reply to  Mrs PoP

I did that with my husband’s report. It was depressing because in a company of 500+ employees, he owns about 5% of the total amount invested. He is very close to retirement, but still that’s a shame.

Someone mentioned this above, but the way we got as much as we do was every time he got a raise, we put it all into the 401k until we started pushing the contribution limit. Pretty painless way to do it.

mark grove
mark grove
5 years ago

Hi Robert. Interesting numbers on the amount people keep in their 401 K’s and IRA’s. And the numbers for how many people are solid multi-millionaires. From the numbers you’re showing,most people in their late 40’s and up won’t ever have the kind of cash they will need to live well independently and healthy into their 80’s and 90’s. Unless people learn to save more and make more money not just as employees, but in business on the side we will be screwed. I’m not trying to be depressing here,believe me I’m not. The question I have is, do you really… Read more »

Dianecy
Dianecy
5 years ago
Reply to  mark grove

If that’s your approach to investing, mark grove, then picture this: You are in a good-size boat named “My Retirement” out in the middle of a vast blue ocean. The sun is shining, the wind is calm and life looks rosy. What you don’t know is that your boat has a leak in it, and that leak is called inflation. Unless you have a ton of money to begin with, you will be very unlikely to ever amass enough to retire. Your boat will sink slowly and inevitably. If you are unwilling to educate yourself and invest in the stock… Read more »

Tre
Tre
5 years ago

I’ve noticed that the more “educated” employees contribute significantly less than our other employees to their 401k.

sarah
sarah
5 years ago
Reply to  Tre

They’re probably paying $500/month to their student loans.

freebird
freebird
5 years ago

I overshot the mark on my retirement accounts, between 401ks and IRAs my RMDs will put me in a higher tax bracket than where I am today. I realized this problem a few years ago so I only contribute just enough to get the company match. Also I don’t think it should matter at all what Jones does. You are paying for your own retirement, so why should you care about Jones? All you need to know is how much you’ll spend and how soon you want to stop working, these alone decide whether your retirement savings will get you… Read more »

Grace @ 401k Plan in USA
Grace @ 401k Plan in USA
5 years ago

I think anyone who wants to achieve financial freedom or anyone who wants to retire rich must not focus their investments only at 401k, they should invest on other investment vehicle like stocks, mutual funds, real estate or even owning a business.

Josh
Josh
5 years ago

I am curious about what others my age (28) have saved and what people should have saved at stages in their lives (30, 40, 50, 60). Obviously, people are in varying types of income levels. But, I want to know how I am doing, or where I should be. Alot of my friends feel that we will never be able to retire, or that the US will not be the same it is now and the opportunity will not be avilable and we will all have to work till we die. Forget Social Security being around – no one is… Read more »

RNR
RNR
5 years ago
Reply to  Josh

Josh, The answer is above, how much to save at what age. That’s a pretty good chart. Despite being in my early 50s, I’m worried about SS too. So nothing new there! This notion of retirement – lazy days playing golf or whatever – is new in our nation. It wasn’t so long ago, when SS was set up, that is was assumed people would die at 65 or shortly after. My grandparents did. Now my parents are in their mid-70s and going strong. Work till you die? I should hope so! I should hope that you love your work,… Read more »

Michelle
Michelle
5 years ago

Gosh, I need to contribute more to my retirement.

Frugalista
Frugalista
5 years ago

For many reasons listed above, there is no way to know how your retirement savings compare to your neighbor’s, but I still find these numbers fascinating. Yes, I have often wondered how well our nest egg compared to others. Especially when I see frightening guidelines that say we should have five times our annual salary by now. It would seem to me, from the numbers presented here and in other resources, that the vast majority of people do not and will not have anything near those amounts saved for retirement, even if you are a diligent saver. Although we have… Read more »

Michelle
Michelle
4 years ago

I’m happy I started my own account to provide for my retirement. Made some good deals on interests and invested a little bit with it. Now that I will go with retirement next year I have enough to last a while. I’ll still invest a little in shares.

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