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Average Retirement Savings by Age: How Much Should You Have In Your 401(k) Now?

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Most people have a different definition of a comfortable living, so addressing how much you should have in your 401(k) is not a simple black-and-white answer — the amount will vary based on age, lifestyle, and finances.

So, how much should you have in your 401(k) compared to others your age? Continue reading to learn the average retirement savings by age and how you can compare your investments for retirement.

An illustration of a piggybank and check accompanies a definition of a 401(k) to help answer the question “what is the average 401(k) balance by age”?

What Is the Average and Median Retirement Savings by Age?

401(k) balances can average roughly $6,000 at the age of 24 to more than $280,000 at the age of 65. Both average and median retirement savings balances can vary greatly depending on a few factors. This can include how long you have been saving for retirement or whether your company provides 401(k) matching, which is when your employer contributes to your retirement savings based on the amount of your contribution.

Average and median account balances from the Vanguard study are heavily influenced each year by market performance and participant base. The median represents the typical participant’s balance — half with balances above and half falling below. Since income typically rises with age, and older participants tend to save at higher rates and contribute for a longer period, we see an increase in the average savings throughout the years.

While savings are personal, the idea of a “nest egg” will likely make you contemplate what your financial future holds. Retirement might seem like a long way down the road, but time flies faster than we realize. And the earlier you start saving for retirement, the better off you’ll be later in life.

Knowing the average retirement savings by age can help you figure out where you stand and how you can be better prepared for the future. Here’s what you can learn from Vanguard’s research on How America Saves in 2022:

Age Average Retirement Savings Balance Median Retirement Savings Balance Average Contribution Rate
<25 $6,264 $1,786 8.0%
25-34 $37,211 $14,068 10.5%
35-44 $97,020 $36,117 10.8%
45-54 $179,200 $61,530 11.4%
55-64 $256,244 $89,716 12.7%
65+ $279,997 $87,725 12.7%
Source: Vanguard

Less Than 25 Years Old

  • Average retirement savings balance: $6,264
  • Median retirement savings balance: $1,786
  • Contribution rate: 8.0 percent

Although many people younger than 25 years old are new to the workforce or are not in a job where a 401(k) plan is offered according to the Vanguard study, 56 percent of those who are eligible for a 401(k) plan are participating in it. This indicates that this generation is indeed planning for retirement early on.

25-34 Years Old

  • Average retirement savings balance: $37,211
  • Median retirement savings balance: $14,068
  • Contribution rate: 10.5 percent

From 25 to 34 years old is the prime time to start aggressively putting money in your retirement savings, since you have likely been in the workforce for a couple of years at this point. In 2021, 81 percent of eligible workers in this age group participated in a 401(k) retirement plan.

35-44 Years Old

  • Average retirement savings balance: $97,020
  • Median retirement savings balance: $36,117
  • Contribution rate: 10.8 percent

If you haven’t yet started contributing to your 401(k) or just recently joined a company that offers 401(k) matching, 35 to 44 years old might be the time to start considering investing in a 401(k) and potentially maxing it out, meaning you would be contributing the highest amount allowed for the year. The possibility of compounding interest on the retirement plan has attracted 84 percent of eligible workers in this age group to participate.

45-54 Years Old

  • Average retirement savings balance: $179,200
  • Median retirement savings balance: $61,530
  • Contribution rate: 11.4 percent

When you hit your 50s, you become eligible to start making larger contributions to your 401(k). Take advantage of this larger contribution of $6,500, sometimes called the “catch-up contribution. Based on the Vanguard study, 84 percent of eligible workers aged 45 to 54-year-olds are participating in their plan.

55-64 Years Old

  • Average retirement savings balance: $256,244
  • Median retirement savings balance: $89,716
  • Contribution rate: 12.7 percent

In your late 50s and early 60s, you will likely have a better idea of what your retirement savings are and you might start making more specific plans for your future. The study done by Vanguard reported that 85 percent of eligible workers in this age group are participating in their plan. If you’re still working at a company that offers 401(k) matching, this is a great chance to increase your savings for a couple more years.

65+ Years Old

  • Average retirement savings balance: $279,997
  • Median retirement savings balance: $87,725
  • Contribution rate: 12.7 percent

Although many workers plan to retire at 64, the average retirement age is 62.  According to the Vanguard study, only 77 percent of workers aged 65 and up in 2021 were participating in a 401(k) plan. Although fewer people are participating, this is still a good time to continue contributing if you’re able.

Roth IRA vs. Traditional IRA vs. 401(k)

You have a few options when it comes to retirement savings. A 401(k), traditional IRA, and Roth IRA plan will all allow you to contribute money and grow your retirement savings — but there are some key differences.  

Retirement Savings Plans
Roth IRA Traditional IRA 401(k)
Contributors Account owners contribute their own funds to the account. Account owners contribute their own funds to the account. Account owners specify paycheck deductions that employers may match.
Annual Contribution Limit (under the age of 50) $6,000 $6,000 $20,500
Catch-Up Contribution Limit (over the age of 50) $7,000 $7,000 $27,000
Investment Options Account owner chooses from index funds, mutual funds, stocks, and other assets. Account owner chooses from index funds, mutual funds, stocks, and other assets. Investment funds are chosen by the administrator of the plan.
Required Minimum Distributions None are required for the account owner. At age 72, distributions must begin. At age 72, distributions must begin.
Withdrawal Rules Withdrawals are tax-free and penalty-free. At age 59 ½, withdrawals are penalty-free. At age 59 ½, withdrawals are penalty-free.
Source: Internal Revenue Service

Roth IRA

While you don’t receive a tax deduction when you contribute to a Roth IRA, you can make tax-free withdrawals during your retirement since the money that goes into a Roth IRA is post-tax. There is also typically no Required Minimum Distributions (RMDs) for the account owner.

Traditional IRA

Contributions to a traditional IRA are eligible for tax deductions for both federal and state taxes. Since the money put into a traditional IRA is pre-tax, withdrawals you make during retirement are subject to income tax. Account owners will also have to pay penalty fees on any withdrawals made before age 59 ½ and are subject to RMDs starting at the age of 72.


Pre-tax contributions made by the account owner and their employer fund traditional 401(k) plans, and withdrawals are subject to income tax during retirement. Some employers may offer a Roth 401(k) plan, so these withdrawals are tax-free since the money contributed was after taxes.

How to Prepare for Your Retirement

Not everyone gets the opportunity to invest in a 401(k) early in life. As soon as it becomes available, it’s best to consider taking advantage of this benefit.

As of 2022, individuals under 49 can legally contribute $20,500 per year. Those 50 or older can save an additional $6,500 as a catch-up contribution. Starting early will allow you to have more savings by the time of retirement.

Four illustrations support some perks of 401(k) accounts as part of an explanation of the average 401(k) balance by age.

Improve Your 401(k) Balance

Improving your 401(k) balance depends on how well you can handle your finances and how much you can contribute to it. Doing your research for the best interest options for your 401(k) plan can be a good way to start building compound interest, which will result in a higher balance.

If you think you’re at a good place with your finances and making sure your living expenses and debts are being paid off, it might be worth considering maxing out your 401(k) contributions. According to Vanguard, only 14 percent of 401(k)participants maxed out their contribution limit of $19,500 in 2021, and you could be one of them.

Whether you start small or contribute close to the limit, consistently contributing to your 401(k) and making sure your plan meets your goals will help you improve your average 401(k) balance and save more for retirement.

Prioritize Your Savings

Whether you started saving late or are frugal with your finances, there are several things you can do to increase the amount of money you put toward your retirement.

It’s advisable to add one year of gross salary saved every five years. So when you’re 30, you’ll want to have saved one year’s worth of your salary; at age 35, you’ll want to have saved two years’ worth of your salary; and at 40, you’ll want to have saved three years’ worth of your salary.

  • Plan to save early: Although it can be hard to save, starting a habit of budgeting and saving early on can help you increase your retirement funds and take advantage of compound interest. After looking at your finances, try to max out your contributions so you can start saving early and aggressively.
  • Start living on a budget: Take a look at your retirement budget and lifestyle. Maybe it’s time to adjust your spending habits or cut back on unnecessary spending. Tightening up your budget can free up funds and allow you to save more.
  • Increase your income: This may be easier said than done, especially in your later years. Consider if it’s time for a raise if you can acquire a new set of skills that will increase your annual salary, or find alternative ways to make money at home or through passive income.
  • Modify your retirement lifestyle: Ask yourself if your retirement budget is realistic. Will you be spending money during your retirement the same way you are now? Or perhaps you’re already retired and can cut back on unnecessary expenses. Whatever the case may be, make sure your future lifestyle and finances align.
  • Pay off high-interest debts: It’s common for people to carry over large debt into their retirement years. High-interest credit cards, personal loans, and lingering student loan debt are types of financial obligations that can keep your hard-earned funds tied up and away from your 401(k) account. Work on paying these off as quickly as possible.

Make compound interest work for you: Compound interest is a simple concept that can rapidly cause wealth to snowball. It happens when the interest that accrues on an amount of money, in turn, accrues interest itself. Do your research to see which 401(k) plans have the best interest-bearing options.

Learn From Your Retirement Savings Balance

Although learning about the average retirement savings by age might help you understand where you stand compared to others, it won’t help you analyze your retirement situation altogether. Since everyone has different finances, lifestyles, and unexpected emergencies, it’s important not to use averages by age as your only benchmark.

Instead, you can use it as a way to motivate yourself to start making better financial decisions and contribute more each year. A good way to benchmark your savings is by using a retirement calculator that will give you more information on how much you will have saved by a certain age and how much you should be saving monthly to achieve your retirement goals. Bottom line — saving early can set you up to be more prosperous later in life.

Retirement Savings by Age FAQ

Here are some commonly asked questions about 401(k) balances by age.

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When Should I Start Saving for Retirement?

The earlier you start putting money towards your retirement, the more time that money has to compound and grow, avoiding the need to max out contributions later in life. Ideally, once you’ve secured a job with a stable income in your 20s, you should start saving for retirement, even if the contributions are small at first. 

What Is the Average 401(k) Balance at Retirement?

According to Vanguard, the average 401(k) balance among Vanguard account holders at the time of retirement, meaning 65 years and older, was $279,997 in 2021 — with the median retirement savings totaling $87,725.

How Much Does the Average American Have in Their 401(k)?

401(k) balances differ depending on your age. For perspective, according to a Vanguard study of their account holders, the average account holder younger than 25 has $6,264 in their 401(k) while those over 65 have $279,997 in their 401(k).

How Much Do You Need to Retire Comfortably?

How much you need to retire comfortably isn’t black-and-white because the cost of living looks different for each individual. Consider what it takes to live comfortably and maintain your lifestyle. Many experts suggest that you’ll need roughly 80 percent of your salary after retirement to avoid making sacrifices.

Start Saving Today For Your Future

Most of us look forward to our retirement years when the money we’ve worked so hard for is now working for us. A 401(k) is one way to achieve a nest egg, so it’s important to take advantage of this benefit if your employer offers it. Planning for a comfortable retirement takes time, due diligence, and budgeting. It’s important to consider your future lifestyle and know where you stand financially by looking at the average retirement savings by age, so you don’t have to worry when you reach your golden years.

Mint can help you plan for retirement by setting your investments on the track to success. 


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Written by Mint

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