Key Points
It's hard to know how much savings you'll need in retirement.
The age at which you can start taking distributions is generally 59 1/2.
Below that age, some people might still qualify for a hardship distribution.
- The $23,760 Social Security bonus most retirees completely overlook ›
It's hard to know exactly how much you need to save for retirement. People's ideas of how they'll spend their retirement years vary widely, so what may be more than adequate for some individuals and couples might fall far short for others.
That said, it's useful to know what others in your age group -- and those on the cusp of retirement in particular -- have saved. Fidelity is a great source for that data because the investment firm oversees $16.4 trillion in assets and more than 50 million IRA, 401(k), and 403(b) retirement accounts. (The latter accounts are for employees of public schools and other nonprofits.)
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If you're 58 or older, retirement is right around the corner, if not already here. According to Fidelity, these adults have an average balance of between $244,900 and $250,000 in their 401(k) accounts.
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While the average balance climbs with age during people's younger and prime working age years, it levels off after age 55.
And remember, the age at which you can start taking distributions from your 401(k) account without penalties is 59 1/2, though there are also conditions under which you can start tapping these accounts earlier. The Rule of 55 allows people who leave their job after 55 (including those who are laid off, fired, or just quit) to start using the money in their 401(k) accounts, though that doesn't apply to accounts you might have had with a previous employer.
Also, people who suffer an immediate and heavy financial need can also qualify under some plans for a so-called hardship distribution, though such distributions are limited to the amount necessary to satisfy the need.
The $23,760 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.
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