If you have access to a 401(k) through your employer, it's wise to take full advantage of it. The 401(k) offers a higher contribution limit, allowing up to $23,000 per year, compared to $7,000 per year for both traditional and Roth IRAs. Many plans also offer employer matching contributions, which can effortlessly double your savings.
But how much should you have saved in your 401(k) by the time you reach your 40s or 50s? That will depend largely on factors like your spending habits and life expectancy. Therefore, it's better to calculate your unique retirement goal, rather than basing your progress solely on how your peers are saving.
There's nothing wrong with seeing how you stack up compared to others your age for curiosity's sake. Here's what the average and median 401(k) balances look like among those ages 45 to 54.
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The average 401(k) balance by age
By the time you're in your mid-40s to early 50s, you should be well on your way to building a robust nest egg. These decades are the peak earning years for most workers and the time to supercharge your savings.
Vanguard's 2024 edition of its "How America Saves" report reveals the average and median account balances among Vanguard 401(k) participants across various age groups:
| Age Group | Average 401(k) Balance | Median 401(k) Balance |
|---|---|---|
| 25 to 34 | $37,557 | $14,933 |
| 35 to 44 | $91,281 | $35,537 |
| 45 to 54 | $168,646 | $60,763 |
| 55 to 64 | $244,750 | $87,571 |
Source: Vanguard. Table by author.
Among those ages 45 to 54, the average balance is $168,646. However, because the average also includes extreme outliers with very low or very high balances, the median balance of $60,763 may be a more accurate snapshot of where most workers stand.
Again, your unique goals matter more than how you compare to the average. By considering your individual needs, you can ensure you're saving enough for a secure retirement.
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