The Average 401(k) Balance by Age

It can be hard to know if your retirement savings are on track, but comparing your balance to that of your peers can help. In particular, examining the average 401(k) balance by age is a good place to start because an employer-sponsored retirement account is an even playing field that gives most the best chance for retirement savings. Since 401(k) accounts allow you to grow your assets tax-deferred, their long-term savings potential is quite high. While you should take full advantage of your 401(k), you’ll also need a retirement plan beyond it. If you’re unsure of where to start, try working with a financial advisor.

Saving for Retirement

There are many ways to save for retirement, from opening your own individual investment account to receiving matching contributions from an employer in their sponsored 401(k). Some people even put their retirement savings into a straight savings account or into real estate that is expected to increase in value over time.

If you have access to an employer-sponsored savings plan like a 401(k), then that might be the best way to save as much as you can for retirement. Plus, you can get free contributions from your employer if they offer to match. This can help you grow your retirement savings much faster than other methods like an IRA which has a much lower maximum contribution limit each year.

Many people worry that they don’t have enough money saved at a given age compared to what they are going to need come retirement time. A great way to know whether you’re on track is to work with a financial advisor who can help you understand how much you should be saving each month for your unique goals. If you need a rough estimate, looking at the average 401(k) balance by age can help you gauge how close you might be to where you should be for your current age.

Average/Median Account Balance by Age

The average American’s retirement account balance varies significantly by age, according to Vanguard’s “How America Saves 2024” report. Drawing on data from more than 1,500 qualified retirement plans and almost 5 million participants, the Vanguard report shows that the average account balance in 2023 was $134,128, up from $112,572 in 2022. Meanwhile, the median account balance was significantly lower than the average: $35,286 in 2023 and $27,376 in 2022.

Here’s a look at how the average and median account balance varies by age:

How Much Should I Contribute to My 401(k)?

There are a couple of rules of thumb to consider when determining exactly how much you should be stashing away. Whether or not your employer matches, how long you’ve been at your job and how much you’re making all factor into how much it’s possible for you to put aside.

Fidelity recommends that you should’ve saved roughly the same amount as your annual salary by the age of 30. However, some other experts say you should aim to have half of your annual salary saved by that age.

If you go by Fidelity’s benchmark and you earn $40,000 a year, aim to have about that amount socked away for retirement by age 30. By the time you’re 40, you should have tripled your annual salary. By age 50, you should have six times. When you turn 60, you should have eight times. And by age 67, you should have 10 times your annual salary in savings.

What If I Have a Below-Average 401(k) Balance for My Age?

If you’re 401(k) savings don’t quite match up with the figures we’ve mentioned, don’t panic. It’s never too late to start saving. While the ideal situation is obviously to have started saving early enough that compound interest can do the work for you, there are ways to get back on track.

The most obvious is to start tucking away as much as possible. For tax year 2025, the maximum amount you can contribute to your 401(k) is $23,500 (up from $23,000 in 2024). Participants aged 50 and older playing catch-up can contribute an additional $7,500 during the calendar year. Also, starting in 2025, workers between 60 and 63 can make “super catch-up contributions” of up to $11,250 to their 401(k) account or similar workplace retirement plan. That means that a person in their early 60s can save up to $34,750 in their 401(k) in 2025 ($23,500 + $11,250).

Though it may seem daunting to start saving at a notably higher rate, there are likely areas where you can cut back. One big thing to look at is whether you can downsize your living space. Also, make sure you don’t have any lingering debts weighing you down.

Another option is to push back your retirement age. This allows you to make up – at least somewhat – for the years you weren’t accruing compound interest. As a bonus, for each year you delay retirement, your Social Security benefits increase. Social Security benefits can’t take the place of retirement savings, but they can help you cover retirement expenses.

There’s also always the option of picking up some work in retirement – also known as a “worktirement.” It’s becoming more and more common for retirees to pick up some work post-retirement to supplement their savings. And if it’s any comfort, you’re not alone in being behind. Numerous surveys over the years have shown that more than half of Americans report feeling behind on their retirement savings.

Alternatives to a 401(k)

A 401(k), a 403(b) and a 457(b) are employer-sponsored retirement plans. These options are particularly lucrative if the employer offers a match. All of the plans operate similarly, but a 403(b) is typically for public employees and a 457(b) is for some government employees.

But they’re not the only options for retirement savings. You might also consider an IRA:  either the traditional IRA or the Roth IRA. Contributions to the traditional IRA, like the 401(k), are tax-deferred. That means you put the untaxed money in now and pay your taxes later. The Roth IRA, on the other hand, gets the tax bill out of the way up front. The money that goes into a Roth IRA has already been taxed, so withdrawals can be made tax-free, assuming certain IRS requirements are satisfied.

However, to qualify for a full contribution to a Roth IRA, single filers have to make a modified adjusted gross income (MAGI) of less than $150,000 for the 2025 tax year (up from $146,000 in 2024). Likewise, couples filing jointly in 2025 must have an MAGI of less than $236,000 (up from $230,000 in 2024) to qualify for the full Roth IRA contribution.

The ability to contribute to a Roth IRA starts to phase out once your MAGI reaches those thresholds. Single filers lose the ability to make partial contributions to a Roth IRA in 2025 once their MAGI exceeds $165,000. Joint filers can no longer contribute to a Roth IRA when their MAGI surpasses $246,000.

The biggest differences between an IRA and a 401(k) are the contribution limits and how you contribute. Contribution limits to a 401(k) are generally much higher than to an IRA. While a 401(k) is offered by an employer, you can easily go online and open an  IRA for yourself.

Your 401(k) contribution automatically comes out of your paycheck, but you’ll have to move the money yourself into an IRA. Notably, only a 401(k) comes with employer matches. You can always put money in both, too. A Roth IRA, for instance, might be a nice complement to your 401(k).

Bottom Line

Whichever option you choose, make sure you’re always managing your money with an eye toward retirement. It’s not impossible to catch up if you fall behind, but it’s far easier to accumulate your retirement savings steadily and slowly over time. To diversify the placement of your money, be sure to also take advantage of multiple retirement savings options. For example, these can include an individual retirement account, a savings account or an annuity.

Tips for Saving for Retirement

• Working on your retirement plans with a financial advisor can help you stay on track. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Take advantage of your company’s 401(k) match. This might seem like a no-brainer, but many Americans aren’t taking full advantage of their employer’s match.

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