The Average 401(k) Balance by Age

What Is the Average 401k Balance?

Knowing the average retirement savings by age can be a motivator that helps you focus your own savings efforts and keeps your on track to meet your goals—which are yours alone. After all, the steps you should take to ensure a safe and happy financial future aren't based on what your peers require but on what you estimate you'll need.

Nonetheless, having a benchmark for an appropriate amount of retirement savings at any given time isn't a bad idea. Here's a look at what your age group (and others) have put away in their 401(k)s.

Average 401(k) Plan Balances by Age

According to Fidelity Investments, the financial services firm that administers more than $12.6 trillion in assets and has more than 45 million IRA, 401(k), and 403(b) accounts, the average 401(k) plan balance increased to $118,600 in the fourth quarter of 2023. 401(k) balances are the highest they've been in nearly two years. The average 401(k) balance rose 14.1% in 2023.

The savings rate—a combination of employee and employer 401(k) contributions— was 13.9%, just shy of Fidelity's suggested savings rate of 15%.

Vanguard found similar results. In 2022, the average 401(k) balance was $112,572. The median 401(k) balance—meaning half of people saved more, and half of people saved less—was $27,376.

How does workplace plan saving break down by age? Here's how Fidelity and Vanguard crunch the numbers.

Twentysomethings (Age 20 to 29)

According to Fidelity:

• Average 401(k) balance: $10,500
• Contribution rate (% of income): 7%

The participation rate of Generation Z participants in defined contribution plans in Q3 2021 was 15.8%. In 2019, it was 12.6%. (Fidelity defines Gen Z individuals as those born from 1997 to 2012.)

According to Vanguard, the average balance for people under age 25 was $5,236, and the median balance was $1,948.

Thirtysomethings (Age 30 to 39)

According to Fidelity:

• Average 401(k) balance: $38,400
• Contribution rate (% of income): 8%

Among millennials (those born between 1981 and 1996), women investors opened 31.3% more IRA accounts in Q3 2021 than they opened a year before. Millennials overall opened 58.5% more Roth IRA accounts in Q3 2021 than they had in Q3 2020. The amount of contributions increased 58.1% in the same period.

The average combined assets at Fidelity of millennials investing in both 401(k) plans and IRAs increased 23.5% from Q3 2020 to Q3 2021.

According to Vanguard, the average balance for people ages 25 to 34 was $30,017, and the median balance was $11,357.

Fortysomethings (Age 40 to 49)

According to Fidelity:

• Average 401(k) balance: $93,400
• Contribution rate (% of income): 8%

The account balance size for Gen Xers may reflect the fact that these folks have logged a good couple of decades in the workforce and have been contributing to plans for that long.

According to Vanguard, the average balance for people ages 35 to 44 was $76,354, and the median balance was $28,318.

Fiftysomethings (Age 50 to 59)

According to Fidelity:

• Average 401(k) balance: $160,000
• Contribution rate (% of income): 10%

The jump in this contribution rate over earlier age groups suggests that many workers are taking advantage of the catch-up provision for 401(k)s, which allows people age 50 and over to deposit more (an extra $7,500 in 2023 as well as 2024) than the standard amount.

According to Vanguard, the average balance for people ages 45 to 54 was $142,069, and the median balance was $48,301.

Sixtysomethings (Age 60 to 69)

According to Fidelity:

• Average 401(k) balance: $182,100
• Contribution rate (% of income): 11%

Workplace plan savings-wise, it's now or never for this group. This contribution rate suggests that many baby boomers are using their workplace plans to add as much as possible to their retirement savings. Fidelity research indicates that Baby Boomers may be too aggressively invested.

According to Vanguard, the average balance for people ages 55 to 64 was $207,874, and the median balance was $71,168.

Seventysomethings (Age 70 to 79)

According to Fidelity:

• Average 401(k) balance: $171,400
• Contribution rate (% of income): 12%

According to Vanguard, the average balance for people ages 65 and over was $232,710, and the median balance was $70,620.

As of January 2020, the Further Consolidated Appropriations Act removed the age limit that made it impossible for individuals 70½ or older to make contributions to traditional IRAs. This opened up an additional retirement savings option for those currently working or running their own business.

Of course, we're living in a vastly different world today than in years past. How each generation's ability to save for retirement will be affected by the financial impacts of the COVID-19 pandemic and other global events is uncertain.

Average 401(k) Balance by Income Level

The average and median 401(k) balances vary widely by income. According to Vanguard, the overall average 401(k) balance is $112,572, and the overall median is $27,376.

Here's the breakdown for averages:

• Incomes under $15,000 per year: $20,765
• Incomes between $15,000 and $29,999 per year: $13,871
• Incomes between $30,000 and $49,000 per year: $28,672
• Incomes between $50,000 and $74,999 per year: $66,918
• Incomes between $75,000 and $99,999 per year: $113,617
• Incomes between $100,00 and $149,999 per year: $186,066
• Incomes $150,000 per year and up: $340,245

Here's the breakdown for medians:

• Incomes under $15,000 per year: $4,033
• Incomes between $15,000 and $29,999 per year: $4,568
• Incomes between $30,000 and $49,000 per year: $11,556
• Incomes between $50,000 and $74,999 per year: $31,064
• Incomes between $75,000 and $99,999 per year: $58,665
• Incomes between $100,00 and $149,999 per year: $104,155
• Incomes $150,000 per year and up: $201,301
  

How Much Should You Save for Retirement?

Fidelity has some pretty concrete ideas.

• By age 30, you should have one time your annual salary saved. For example, if you're earning $50,000, you should have $50,000 banked for retirement.
• By age 40, you should have three times your annual salary already saved.
• By age 50, you should have six times your salary in an account.
• By age 60, you should have eight times your salary working for you.
• By age 67, your total savings total goal is 10 times the amount of your current annual salary. So, for example, if you're earning $75,000 per year, you should have $750,000 saved.

Another Way to Estimate Retirement Savings

There's also the tried-and-true 80% rule. Save enough to have 80% of your pre-retirement salary. For example, if you make roughly $75,000 a year, you'd need 80% of that, or $60,000 per year during your retirement years to maintain the same standard of living you had while working.

What's the Retirement Savings Reality?

If you compare recommended saving amounts to Fidelity's 401(k) average balance figures, it appears that most Americans are behind in saving for retirement, even if they have savings in addition to what's in their 401(k)s.

A 2019 Government Accountability Office study found that nearly 48% of Americans age 55 and older didn’t have any retirement nest egg or traditional pension plan as of 2016.

Those who did have retirement accounts didn't have enough money in them. According to our research, 56- to 61-year-olds have an average of $163,577. Those age 65 to 74 have even less. 

If that money were turned into a lifetime annuity, it would only amount to a few hundred dollars a month. Any financial planner would agree that it’s not nearly enough to get by on.

In its 20th annual survey, the Transamerica Center for Retirement Studies found that millennials had median retirement savings of approximately $23,000, compared to $64,000 for Gen Xers and $144,000 for baby boomers.

Similar findings come from the Economic Policy Institute. It estimated in 2019 that those age 32 to 37 had saved around $31,644. That figure rose substantially to around $67,270 for those age 38 to 43. For those age 44 to 49, the average retirement savings were $81,347. Finally, those age 50 to 55 had saved an average of $124,831.

Although these may seem like healthy amounts, they are well below even the most conservative goals.

According to Transamerica, part of the problem might be a lack of financial understanding and education. Sixty-eight percent of workers believed they didn't know as much about retirement as they should. 

In fact, 37% of workers said they didn’t know anything about asset allocation, and around 22% admitted to not knowing how their retirement money was invested.

For that matter, only 20% of Americans said they knew a great deal about Social Security, even though nearly 74% expect it to be a significant source of income when they stop working.

Tips to Help You Save for Retirement

That most Americans, espically women, don’t have nearly enough savings to sustain them through retirement is sad but true. How do you avoid that fate? Here are some steps that you can take, whether you're early in your career or closer to your retirement.

• Take the time to carefully consider and estimate how much you'll need to live comfortably after your 9-to-5 days are over. Based on that, you'll be better able to develop a plan to accrue the sum you need, by the time you need it.
• Maximize your contributions to your workplace plan. If you cannot contribute that much, at least contribute the amount needed to enable the matching employer contributions that can boost your savings.
• If you haven't yet, open an IRA and contribute as much as you can to it annually, as well. For 2022, you can contribute up to $6,000, or $7,000 if you're 50 or older. In 2023, that limit increases to $6,500, or $7,500 if you're 50 or older.
  
• Invest more aggressively earlier in your career to capitalize on opportunities to increase your account value. Even if you're older, you may want to consider adjusting your allocations to allow for greater growth. Speak to a financial advisor to be sure you're up to speed on different asset allocations and what might be appropriate for your needs and age.
• Examine the fees related to your investments. Since they can have an impact on your account balances over time, lowering them should be a priority.
• Learn how Social Security (and Medicare) work, and what you might expect from them in benefits. Register for an online account at the Social Security Administration's website. You'll be able to view and estimate how much you'll receive per month in benefits when you retire, based on the years you've worked and your earnings.

Of course, start saving and investing as early as you possibly can. The longer you have, the better, especially where the power of compounding interest is concerned. Retirement may seem a long way off but when it comes to saving for it, the days can dwindle away quickly and any delay costs more in the long run.

The Bottom Line

Saving for your retirement is perhaps one of the most important financial goals that you will ever have. When you can't, or don't wish to, work any longer, you will need substantial savings to sustain you, whatever your lifestyle.

Carve out the time to review your savings today. Launch a concrete savings plan if you're younger or corrective savings course of action if you're older. Be disciplined about putting money aside now to ensure a financially secure future.