What Is The Average 401(k) Balance By Age?

You know that contributing to your 401(k) is a key part of building a retirement nest egg that will keep you financially comfortable during your after-work years. But how much should you have in your 401(k) when you are 30? What about when you hit your 40^th birthday or you turn 50?

Here’s a look at one report on the average 401(k) balances by age. See how you compare, learn how much you should have in your account by specific milestones and learn the steps that you can take to boost your 401(k) savings.

The Average 401(k) Balance By Age Group

Are you on track with your retirement savings goals? Having money invested in a 401(k) might be a key to meeting them.

Not everyone has a 401(k). Some save for retirement through Roth and traditional IRAs. Others rely on a pension plan. But if your main source of retirement funds is coming from your employer’s 401(k) plan, you want to be certain you’re contributing as much as you can from each paycheck.

The IRS says that you can contribute a maximum of $23,000 to a 401(k) plan in 2024. If you are 50 or older, you can contribute an additional $7,000 in catch-up funds, meaning that you can contribute up to $30,500 this year to your 401(k) plan.

How do your 401(k) balances compare with others in your age group? In its 2023 How America Saves Report, investment management company Vanguard listed the average balances in its 401(k) plans according to the ages of account holders. Here are those results:

SOURCE: Vanguard’s 2023 How America Saves Report

The Median 401(k) Balance By Age Group

The numbers above are average figures. But what about the median savings by age group? This could provide a more accurate look at how well U.S. employees are doing at stowing money in their 401(k) accounts.

That’s because the median is the amount at which half of all savers are saving more money and half are saving less. For instance, when Vanguard’s 2023 How America Saves Report states that the median Vanguard 401(k) balance of workers from the ages of 25 to 34 is $11,357, this means that half of all savers have saved more than $11,357 and half have saved less.

The median figure is less impacted by employees who have very high or very low balances in their 401(k) accounts.

SOURCE: Vanguard’s 2023 How America Saves Report

Average And Median 401(k) Balances Examined By Age

How much money do workers have saved in their 401(k) accounts by age? And how are you doing in comparison? Here is a closer look at the average and median 401(k) balances in the United States by age.

Average And Median 401(k) Balances For Ages Under 25

• Average 401(k) balance: $5,236
• Median 401(k) balance: $1,948

It’s little surprise that Vanguard’s How America Saves Report found that workers under the age of 25 had relatively little saved in their 401(k) plans. These employees haven’t worked for many years, so they haven’t had as much time to build their 401(k) balances as have older workers. This doesn’t mean that you shouldn’t start saving as soon as you start working. The more you save at an early age, the higher the odds that you’ll reach your savings goals by the time you reach retirement. Financial experts recommend that you save from 10% to 15% of each paycheck in your 401(k) plan.

Average And Median 401(k) Balances For Ages 25 – 34

• Average 401(k) balance: $30,017
• Median 401(k) balance: $11,357

The average and median 401(k) balances begin to grow quickly once workers reach the 25- to 34-year-old range. This isn’t surprising: These workers have logged more years on the job, giving them more time to invest in their 401(k) plans. It can be tempting for workers in this age range to reduce their retirement contributions. After all, they might be starting families and buying homes, expensive life changes. But again, it’s important to keep saving if you hope to enjoy a retirement free of financial worries.

Average And Median 401(k) Balances For Ages 35 – 44

• Average 401(k) balance: $76,345
• Median 401(k) balance: $28,318

Your 401(k) balance will grow faster the older you get. That’s thanks to compound earnings. As your 401(k)’s balance grows larger, it will earn more in interest. That’s why it’s so important to keep investing at a consistent pace as you enter your 40s. Your reward? Your account balance will start to grow at a faster pace, as the numbers above from Vanguard illustrate.

Average And Median 401(k) Balances For Ages 45 – 54

• Average 401(k) balance: $142,069
• Median 401(k) balance: $48,301

That $142,069 average 401(k) balance reported by Vanguard for workers from the ages of 45 to 54 looks good. But the median balance of $48,301? That isn’t as impressive. This means that in Vanguard’s report, half of the workers in this age range had more than $48,301 saved and half less. That’s a lot of workers with a small 401(k) balance. If you are in this category, don’t give up hope. There is still time to grow your savings. Consider investing a larger percent of your paycheck to your 401(k) to help catch up on your earnings. Starting at age 50, you can make catch-up payments, extra deposits in your 401(k). In 2024, you can make an extra $7,000 in catch-up payments, according to the IRS.

Average And Median 401(k) Balances For Ages 55 – 64

• Average 401(k) balance: $207,874
• Median 401(k) balance: $71,168 

Retirement is close once you hit this age range. That means it’s even more important to continue to build your retirement savings. How much should you have saved by the time you reach 60? Investment management company Fidelity says that you should have saved eight times your annual salary by the time you reach 60. If you earn $100,000 a year, this means that you should have $800,000 saved by this date. This is only a rough guideline, though. You might need a lower amount of savings if your spouse has a pension plan or if you are retiring without expenses such as a mortgage payment.

Average And Median 401(k) Balances For Ages 65+

• Average 401(k) balance: $232,710
• Median 401(k) balance: $70,620

Once you hit 65, your days of saving for retirement might be nearly done. In fact, the IRS requires that you start making regular withdrawals from your 401(k) account after you turn 72. Fidelity says that by the time you hit 67, you should have saved 10 times your annual salary. Don’t panic if you haven’t hit this number. How much you need in your retirement years will vary depending on the cost of where you live, your monthly expenses and whether you have any other sources of income.

Saving For Retirement: Best Practices

Worried that you haven’t saved enough for retirement? Don’t panic. You can take several steps to boost the balance of your 401(k).

• Use a retirement calculator: An online retirement calculator can help you determine whether you are on pace to meet your retirement goals. You'll enter your current age, the age at which you want to retire, your annual household income and the percentage of this income that you plan to save for retirement each year. You'll also input the dollars you've already saved for retirement, as well as any expected income boosts you expect and the number of years of retirement income you expect to need. The calculator will then tell you if you are on track to reach your retirement goals or if you need to save more.
• Add IRA accounts: If you need to save more, consider opening an additional IRA account, either a traditional one or a Roth IRA. This way, you can stash retirement income, and watch it grow, in both a 401(k) plan provided by your employer and an IRA maintained by you. You can contribute a maximum of $7,000 to an IRA in 2024 if you are under the age of 50 and $8,000 if you are 50 or older. When comparing IRAs to 401(k) accounts, know that that the key difference is that your employer manages your 401(k) while you are responsible for making contributions at your own pace with an IRA.
• Utilize a financial advisor: You can also work with a financial advisor who can help you plan your retirement savings so that you reach your goals. The Corporate Financial Institute says that financial advisors can help you build your wealth and reduce your debts.
• Watch out for fees: If you are investing in IRAs or other investment savings vehicles, watch for fees. Some fund managers charge fees that can eat into your savings. For instance, financial manager Edward Jones charges an annual fee of $75 for traditional and Roth IRAs and $40 for simple and SEP IRAs. Fees shouldn’t be the only factor you consider when choosing a fund manager. Some managers might charge fees but also generate higher average returns for their investors.
• Understand Social Security: It’s important to understand, too, how much money you’ll be receiving from Social Security each month. For many workers, Social Security payments and disbursements from 401(k) accounts and IRAs work together to provide a financial nest egg during retirement. To see how much money you’ll receive in Social Security payments depending on when you retire, you can create an online account with the Social Security Administration. You can then provide your age and financial information to receive an estimate of your future monthly benefits.
• Automate your contributions: Automating your 401(k) contributions is the easiest way to ensure that you continually contribute to your retirement savings. Work with your human-resources department to set up an automatic withdrawal from your paycheck that will be deposited into your 401(k) account.

Common FAQs About 401(k) Accounts 

Questions about 401(k) accounts and how they work? Here are answers to some of the more common.

Is it wise to max out my 401(k) at my age?

It always makes sense to contribute as much as you can to your 401(k). How much you can contribute, though, depends on a variety of factors, including whether you have enough money to build and maintain a financial emergency fund, if you need to put away money for a child’s college tuition or if you are saving for a down payment on a home. It pays, though, to contribute as much as you can each year to your 401(k) account.

Does diversifying my portfolio make sense with a 401(k)?

Yes, diversifying your portfolio is a sound strategy when saving with a 401(k). Most 401(k) plans offer a range of fund options, with some considered conservative, offering slower growth rates but safer investments, and others aggressive, funds that have the potential to grow quickly but could also see bigger losses. You might switch to a more conservative fund as you get closer to retirement after investing in a more aggressive one in your earlier working years. You can also choose a balanced fund that contains both safe and riskier investments.

What are “catch-up contributions” to my 401(k)?

When you reach the age of 50, you can contribute a higher amount to your 401(k) each year. This allows you to “catch up” if you are not on pace to meet your retirement goals. In 2024, you can make an extra $7,000 in catch-up payments if you are 50 or older, according to the IRS.

How much do I need in my 401(k) to retire early?

How do you know if you have enough money saved in your retirement savings accounts to retire early? There is no one answer. But many financial experts recommend that you save 10 times your annual salary by the time you reach retirement age. If you earn $80,000 a year, then, you should have $800,000 saved by the time you retire. How to get there? Many point to the 50/30/20 rule. This rule states that you should spend 50% of your money on needs, such as your mortgage payment, auto loan payment, food and electricity; and 30% on wants, such as dining out, vacations and entertainment. You should then deposit the remaining 20% of your money in savings. By following this rule, you’ll increase your odds of building enough retirement savings to retire early.

The Bottom Line: Your 401(k) Is Important

Investing in your 401(k) is a key to saving for a stress-free and happy retirement. Need help determining how much you should be saving? You can sign up for the Rocket Money^SM app for help with all your financial needs.