Here's how much the average American has in their 401(k) — in their 40s, 50s, 60s and 70s. How do you compare?

amazon, here's how much the average american has in their 401(k) — in their 40s, 50s, 60s and 70s. how do you compare?

Here's the average 401(k) balance by age

Retirement can seem far away when you're starting your working life. But, by the time you hit 40 you're officially middle aged and suddenly the day you'll leave work for good doesn't seem so distant any more.

If you've reached this phase of life, you may be seriously starting to wonder if you're on track for a secure retirement — and you may be curious about how your savings stack up against your peers. Fortunately, the data is available to tell you how you're doing in comparison to your fellow Americans.

Don't miss

  • Jeff Bezos told his siblings to invest $10K in his startup called Amazon, and now their stake is worth over $1B — 3 ways to get rich without having to gamble on risky public stocks
  • Car insurance rates have spiked in the US to a stunning $2,150/year — but you can be smarter than that. Here's how you can save yourself as much as $820 annually in minutes (it's 100% free)
  • These 5 magic money moves will boost you up America's net worth ladder in 2024 — and you can complete each step within minutes. Here's how

Check out the average 401(k) balances among Americans in their 40s, 50s, 60s and 70s to see whether you have more or less than the others who'll be joining you in earning your senior discount before you know it.

Average 401(k) balances among older Americans

Below you can see the average and median 401(k) balances for people in their 40s and beyond. The data is from Empower’s free online financial dashboard which is used by over 3 million Americans as of November 2022.

40s

Average balance - $344,182 , Median balance - $151,274

50s

Average balance - $558,740 , Median balance - $247,338

60s

Average balance - $555,621 , Median balance - $209,382

70s

Average balance - $417,379 , Median balance - $103,219

The big gap in average versus median balance is explained by a small number of very large accounts skewing the data. Still, while average balances are higher, these numbers show many older Americans are falling short.

U.S. adults believe they need $1.46 million in savings to retire comfortably, according to a Northwestern Mutual study.

According to the popular 4% rule, only withdrawing 4% of your nest egg during retirement ensures you won’t run out of money for 30 years. If you assume the 401(k) is the entirety of someone’s retirement savings, a balance of $555,621 at age 65 when they retire would give them around $22,000 in annual income in the first year. The median balance of $209,382 would translate to less than $10,000 to live on in the year.

This means the typical American is in some trouble when it comes to their retirement security.

Boost your 401(k) balance

If you're in your 40s or beyond, hopefully your 401(k) balance is above average and money concerns won't be an issue for your retirement. But, as the numbers show, this is far from the reality for most.

If your balance falls short, there are some steps to take to get back on track

  1. Make retirement savings a top priority. If you're funneling money to other goals such as saving for college for your kids, you may want to redirect those funds. Your kids can borrow for school and have time to build wealth. You can't take loans for your retirement and your time is running short. Responsibly investing in the stock market helps you earn returns that build your nest egg more quickly.
  2. Take advantage of help that's available. The government subsidizes retirement savings by making contributions to 401(k) and IRA accounts deductible. Your employer may also offer a 401(k) match, which means you earn free money by contributing to your workplace plan. Aim to maximize your contributions to whatever plan you have.
  3. Understand your goals. If you haven't already set a retirement savings goal, do it today. Assuming you'll need 80% of your final salary each year is a quick-and-simple approach, although there are other ways to estimate your own retirement savings target.
  4. Make saving automatic. You're less likely to miss a retirement account contribution if it happens automatically. Have money transferred to your 401(k) from your paychecks or to an IRA on payday.

Don't get discouraged if you're not on track for retirement. Besides the above steps, you can also consider annuities, downsizing or working longer than you planned. Also make sure you don’t have any money misconceptions about retirement. Do take action though, as the longer you wait, the more difficult it becomes to catch up.

What to read next

  • Car insurance premiums in America are through the roof — and only getting worse. But 5 minutes could have you paying as little as $29/month
  • Thanks to Jeff Bezos, you can now use $100 to cash in on prime real estate — without the headache of being a landlord. Here's how
  • 'It's not taxed at all': Warren Buffett shares the 'best investment' you can make when battling rising costs — take advantage today

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

OTHER NEWS

5 minutes ago

Video: Fury after police ram terrified runaway cow with their squad car down London street - with cops forced to refer itself to watchdog amid backlash and Home Secretary demanding explanation over 'heavy-handed' incident

10 minutes ago

Why student loan forgiveness sparks anger: A philosopher, attorney general, sociologist and religious thought expert weigh in

10 minutes ago

Detroit pastor thanks Trump for visiting the ‘hood’ as Biden, Obama who ‘never came’ attend LA fundraiser

10 minutes ago

Andrew Garfield keeps it casual as he enjoys a date night with glamorous doctor girlfriend Kate Tomas at Chiltern Firehouse

12 minutes ago

Olympics-Kipyegon targets double gold in Paris

12 minutes ago

Wilding review – a biodiversity success story in West Sussex

12 minutes ago

Lok Sabha Elections 2024 | Rajeev Chandrasekhar Counters Elon Musk’s EVM Tampering Remark | News18

16 minutes ago

Hamburg police fire shots at axe-wielding person at Euro 2024 fan parade

18 minutes ago

Feeney claims back-to-back Darwin race wins

18 minutes ago

Exodus of skilled workforce rises 119%

18 minutes ago

American VAR expert Christina Unkel gives ITV edge over BBC at Euro 2024

18 minutes ago

Insider Today: Meta's manager squeeze

18 minutes ago

Fewer than 200,000 Britons living abroad apply to vote in UK election

18 minutes ago

Frustration and loathing in Las Vegas: What Nevada voters REALLY think of a Trump Biden 2024 election

18 minutes ago

Video: As Kate Middleton gets back behind the camera, how the Princess' passion for taking pictures has seen her capture some of the most touching royal photos in decades

21 minutes ago

Euro 2024: Man shot by Hamburg police after ax attack

22 minutes ago

Trump allies hope his daughter's father-in-law can help flip Arab American votes

23 minutes ago

George Strait Breaks US Concert Attendance Record

23 minutes ago

Steelers Fall To Middle Of The Pack In Final NFL Offseason Power Rankings

23 minutes ago

The Bosasa connection: Gwede Mantashe faces bribery probe

23 minutes ago

The current favourite to be Ireland's next manager

23 minutes ago

Architect David Chipperfield: ‘We used to know what progress was. Now we’re not so sure’

23 minutes ago

‘Panda diplomacy’: China pledges to send Adelaide Zoo two more pandas

23 minutes ago

He Immigrated to the U.S. and Got a Job at McDonald's — Then His Aversion to Being 'Too Comfortable' Led to a Fast-Growing Company That's Hard to Miss

23 minutes ago

‘We’re going to give it a full go’ – Glasgow Warriors throw down the gauntlet ahead of URC Final against the Bulls

23 minutes ago

Trump allies hope his daughter Tiffany's father-in-law can help flip Arab American votes in Michigan

23 minutes ago

England starting XI for Euro 2024 opener against Serbia revealed with Saka set to start

23 minutes ago

James Haskell is every inch the doting dad as he spend some quality time with his daughter Bodhi, 22 months, while out in Hampstead

23 minutes ago

Caitlin Clark and Angel Reese resume WNBA's fiercest rivalry TODAY: Fever host Sky for first time since Chennedy Carter's body check on No. 1 draft pick... but will tensions boil over again?

23 minutes ago

Rebecca Judd reveals bizarre way she winds down at night: 'This could sound controversial'

26 minutes ago

Incredible new photos of John Farnham revealed at son’s wedding

30 minutes ago

Sydney Vivid Festival: NSW Premier Chris Minns apologies for drone show cancellation on final night

30 minutes ago

Teacher accused of having sex with female ex-student and tried to lure her into threesome with her husband loses her license

32 minutes ago

‘Titanic deckchairs’ as governor at super-prison suffering staff exodus sent to run jail hit by deaths

32 minutes ago

5 Of The Most Expensive Pontiacs Ever Sold At Auction

32 minutes ago

New Caledonia airport to fully reopen following closure during deadly unrest

32 minutes ago

All eyes on who Ramaphosa will elect in his new Cabinet

32 minutes ago

80 countries at a Swiss conference agree that ‘territorial integrity’ of Ukraine must be basis of any peace agreement

35 minutes ago

North Richland Hills fire, EMS departments adopt potentially life-saving app technology

37 minutes ago

MORE travel hell at Birmingham Airport sparked by 100ml liquid rule as travellers queue out the door - amid fears chaos could last all summer