Terry Turner, Financial writer for Annuity.org
  • Written By
    Terry Turner

    Terry Turner

    Senior Financial Writer and Financial Wellness Facilitator

    Terry Turner is a senior financial writer for Annuity.org. He holds a financial wellness facilitator certificate from the Financial Wellness Foundation and the National Wellness Institute, and he is an active member of the Association for Financial Counseling & Planning Education (AFCPE®).

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  • Edited By
    Savannah Hanson
    Savannah Hanson, financial editor for Annuity.org

    Savannah Hanson

    Senior Financial Editor

    Savannah Hanson is an accomplished writer, editor and content marketer. She joined Annuity.org as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy.

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  • Updated: January 23, 2023
  • 9 min read time
  • This page features 11 Cited Research Articles
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How to Cite Annuity.org's Article

APA Turner, T. (2023, January 23). Average 401(k) Balance by Age: Your Retirement Timeline. Annuity.org. Retrieved January 30, 2023, from https://www.annuity.org/retirement/401k/average-balance-by-age/

MLA Turner, Terry. "Average 401(k) Balance by Age: Your Retirement Timeline." Annuity.org, 23 Jan 2023, https://www.annuity.org/retirement/401k/average-balance-by-age/.

Chicago Turner, Terry. "Average 401(k) Balance by Age: Your Retirement Timeline." Annuity.org. Last modified January 23, 2023. https://www.annuity.org/retirement/401k/average-balance-by-age/.

A 401(k) account is a powerful and accessible savings tool to help you prepare for retirement. In fact, the Investment Company Institute reports that Americans held $6.3 trillion in 401(k) savings as of September 2022.

But are you contributing enough to your 401(k)? According to the Federal Reserve, only 40% of Americans believe their retirement savings are on track. Our median and average 401(k) balance by age timeline will help you strategize and see how your 401(k) savings stack up against others.

Average 401(k) Savings by Age

Average 401k Savings by Age

Knowing the median and average 401(k) balances in the U.S. can guide your retirement planning. According to a 2022 study from The Transamerica Center For Retirement Studies, most Americans began saving in their late 20s and early 30s. However, Gen Z recognizes the value of saving early and has started saving at a median age of 19.

Check out the 401(k) retirement savings chart below to see how your account balance compares.

Vanguard 401(k) Balances by Age
AgeAverage BalanceMedian Balance
<25 $6,264$1,786
25-34 $37,211$14,068
35-44 $97,020$36,117
45-54 $179,200$61,530
55-64 $256,244$89,716
65+ $279,997$87,725

While we highlight average defined contribution 401(k) balances, it’s important to note that these numbers don’t include other retirement investments, like IRAs.

To help you inform your retirement savings plan, we’ve used information from Vanguard to outline the average balance of 401(k)s along with recommended savings goals for each generation below.

Average 401(k) Balance in Your Early 20s (<25)

Average 401k for early twenties

According to the Federal Reserve, most young adults (62%) have begun saving for retirement by their 20s, though only 28% of this group believe their savings are on track.

Saving early offers significant benefits to your retirement planning. Even small contributions in your 20s can pay off, as compound interest helps your balance grow over a longer period.

Some experts recommend investing 15%–20% of your income as soon as it’s feasible for your budget. If that’s not doable, try increasing your current contributions by as little as 1% each year to support your retirement.

Average 401(k) Balance for Ages 25–34

Average 401k for ages 25-34

According to the Federal Reserve, most young adults (62%) have begun saving for retirement by their 20s, though only 28% of this group believe their savings are on track.

Income increases with age, which means Americans are better suited to invest significant portions of their income toward retirement.

We recommend you save the equivalent of your annual income by age 30. So if you make $60,000 a year, plan to save that dollar amount before your 30th birthday.

25% of Americans ages 30-44 had no retirement savings in 2021.

Source: Federal Reserve

Average 401(k) Balance for Ages 35–44

Average 401k for ages 35-44

By age 44, 75% of Americans have a retirement account, though only 39% believe they’re on track to reach their retirement goals.

Considering that $62,244 is the median income for this age group, many Americans fall short of having one year of their salary saved. Just 46% of their annual income is represented in a defined contribution plan. We recommend that you have three times your yearly salary saved for retirement by this age.

Average 401(k) Balance for Ages 45–54

Average 401k for ages 45-54

With just 10 to 20 years until retirement age, Americans’ median retirement savings have caught up to their median annual income of $63,648, but are far off from ideal savings. For a comfortable retirement, we recommend having about six times your yearly salary saved by 50.

Savers falling behind on their retirement goals can benefit from working with a financial advisor. A professional advisor can help late-start planners estimate their Social Security benefits, retirement taxes and health costs to set accurate saving and spending goals.

95% of people who have hired financial advisors say they’re worth the money.

Source: Magnify Money

Average 401(k) Balance for Ages 55–64

Average 401k for ages 55-64

By your 50s, you’re eligible for “catch-up” contributions, which increases your 401(k) annual contribution limit to $30,000. As retirement approaches, it’s worth contributing as much as possible to reach eight times your yearly salary.

To prepare for your golden years, it’s a good idea to outline retirement budgets and spending allocations. Try out different budgets to see what’s comfortable for you.

Average 401(k) Balance for Ages 65+

Average 401k for ages 65+

By age 62, seniors are eligible to receive partial Social Security benefits, while full retirement benefits kick in at age 67 for most pre-retired Americans.

The median 401(k) balance begins to decline after age 65 — likely a result of retired individuals beginning to withdraw from their savings. Average retirement balances see a slight increase from the previous age range as many adults continue to work throughout retirement and collect interest on existing investments.

Workers who choose to stay in the workforce through age 70 without collecting Social Security can enjoy increased benefits. This payout can increase by 8% each year you delay collecting benefits.

How To Set Retirement Savings Goals

The U.S. Department of Labor recommends individuals save between 70% and 90% of their preretirement income for each year of retirement. With inflation, a goal of 80% is a good place to start.

Since the average life expectancy in the U.S. is around 76 as of 2021, you should plan for longer than that to ensure your savings won’t run out. For a savings milestone for each decade, check out our timeline below.

Retirement goals for every decade

Having eight times your monthly income by 60 might seem like a lot, but this should give you more than enough funds to enjoy the rest of your life in comfort.

If you find yourself falling behind on your savings goals, it’s a good idea to reevaluate your budget and cut back on unnecessary spending. For additional guidance, seek out a financial advisor to help you along the way.

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How Much Should You Contribute to Your 401(k)?

According to Tommy Gallagher, ex-investment banker and founder of Top Mobile Banks, “Your overall goal should be to contribute at least 15-20% of your gross income each year to 401(k)s, with a goal to increase your contributions as you age and your salary increases.

“Ideally, individuals should try to increase their 401(k) contributions with salary increases to fully utilize the employer match and build a solid retirement account. Investing more now can be more beneficial in the long run since compound interest will have time to kick in.”

That said, what you can afford depends on your pay and lifestyle. And regardless of your income, the most you can contribute annually to a 401(k) in 2023 is $22,500 or $30,000 if you’re over the age of 50.

How To Improve Your Retirement Savings Strategy

5 tips to improve your retirement savings

Before you start saving for retirement, it’s best to have a plan of action. Here are some simple tips to help you save for your golden years:

  • Start today: Generally, risk tolerance decreases with age. The sooner you start saving and exploring high-return investments, the more money you can save through compounding interest.
  • Make the most of your 401(k): If your employer matches a percentage of your 401(k) contributions, you should contribute as much as possible to make the most of the match.
  • Automate your savings: It’s easy to overlook savings when life gets busy. Most banking apps allow you to automate savings, ensuring you never miss a deposit.
  • Invest in an annuity: Annuities provide a guaranteed income stream for the duration of your retirement in case you outlive your savings. You can also name beneficiaries to receive your inheritance when you pass.
  • Delay Social Security: For every year you delay receiving Social Security payments after 62, your future payments increase by 8%.

Estimated retirement needs can evolve over time, but a robust savings strategy early on provides a foundation for your investments to grow and allows you to retire on time.

Next Steps

As you prepare for retirement, it’s important to have savings goals outlined to help you stay on track. Understanding the average 401(k) balances of others your age helps you see whether you’re ahead of the fold or need to revisit your savings strategy.

Our free tool can help you find a financial advisor to fulfill your savings needs. Once you’ve been matched, consult with them for free with no obligation.

For more information on creating a retirement savings strategy, check out our infographic below.

Download Infographic

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Our free tool can help you find an advisor who serves your needs. Get matched with a financial advisor who fits your unique criteria. Once you’ve been matched, consult for free with no obligation.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: January 23, 2023
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11 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Investment Company Institute. (2022, Dec. 15). Release: Quarterly Retirement Data. Retrieved from https://www.ici.org/statistical-report/ret_22_q3
  2. Federal Reserve Board Publication. (2022, May). Economic Well-Being of U.S. Households in 2021. Retrieved from https://www.federalreserve.gov/publications/files/2021-report-economic-well-being-us-households-202205.pdf
  3. Vanguard. (2022, June). How America Saves 2022. Retrieved from https://institutional.vanguard.com/content/dam/inst/vanguard-has/insights-pdfs/22_TL_HAS_FullReport_2022.pdf
  4. Transamerica Institute. (2022, October). Emerging From the COVID-19 Pandemic: Four Generations Prepare for Retirement. Retrieved from https://transamericainstitute.org/docs/default-source/research/emerging-from-the-covid-19-pandemic---four-generations-prepare-for-retirement-report.pdf
  5. Bureau of Labor Statistics. (2022, Oct. 18). Usual Weekly Earnings of Wage and Salary Workers Third Quarter 2022. Retrieved from https://www.bls.gov/news.release/pdf/wkyeng.pdf
  6. Internal Revenue Service. (2022, Nov. 21). Taxpayers should review the 401(k) and IRA limit increases for 2023. Retrieved from https://www.irs.gov/newsroom/taxpayers-should-review-the-401k-and-ira-limit-increases-for-2023#:~:text=The%20amount%20individuals%20can%20contribute,up%20from%20%2420%2C500%20for%202022.
  7. Delfino, Devon. (2021, March 22). Half of Consumers Think Financial Advisors Are More Expensive Than They Are, But Almost All Who Use One Say They’re Worth It. Retrieved from https://www.magnifymoney.com/blog/news/financial-advisors-cost-survey/
  8. Department of Labor. (2021, September). Top 10 Ways To Prepare For Retirement. Retrieved from https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/top-10-ways-to-prepare-for-retirement.pdf
  9. CDC. (2022, August). Life Expectancy in the U.S. Dropped for the Second Year in a Row in 2021. Retrieved from https://www.cdc.gov/nchs/data/vsrr/vsrr015-508.pdf
  10. Gallagher, T. (2022, December 19). Personal communication.
  11. Vanguard. (2022, June). How America Saves 2022. Retrieved from https://institutional.vanguard.com/content/dam/inst/vanguard-has/insights-pdfs/22_TL_HAS_FullReport_2022.pdf