Disclosure: Clicking on links may earn me commission from Joining Augusta Precious Metals, at no additional cost to you. Thanks for reading!

Wondering if your 401k is on track? Discover the average 401k by age and see how your savings compare.

Average 401(k) by Age: How Do You Compare?

Disclaimer: This website and its content are for informational purposes only and is not financial advice.

What is a 401(k)? A Quick Overview

A 401(k) is a popular employer-sponsored retirement savings plan that allows employees to contribute a portion of their pre-tax (or after-tax, in the case of a Roth 401(k)) salary to an investment account. The money grows tax-deferred in a traditional 401(k), meaning you don't pay taxes on the investment gains until you withdraw the money in retirement.

With a Roth 401(k), you pay taxes on your contributions now, but qualified withdrawals in retirement are tax-free. Many employers offer matching contributions, essentially providing "free money" to boost your savings. This makes a 401(k) an incredibly powerful tool for long-term wealth building.

The Average 401(k) by Age: The Breakdown

When we talk about the average 401(k) by age, it's important to remember that these are snapshots in time, and individual situations vary greatly. Factors like income, industry, geographic location, and personal savings habits all play a significant role. However, looking at the average 401(k) by age can provide a general benchmark.

Here's a general idea of what the average 401(k) by age might look like, based on recent data from major financial institutions (as of late 2024 / early 2025):

• 20s: The Starting Line

• Average 401(k) by age 20s: While specific figures can fluctuate, you might see averages ranging from approximately $10,000 to $20,000.

• At this stage, many individuals are just beginning their careers and learning about retirement savings. The key here is simply to start. Even small, consistent contributions to your 401(k) can make a huge difference over the long run thanks to the power of compounding. The average 401(k) by age in your 20s reflects the foundational years of saving.

• 30s: Building Momentum

• Average 401(k) by age 30s: Averages for this age group might fall in the range of $50,000 to $70,000.

• In your 30s, careers often accelerate, and incomes typically increase. This is an excellent time to ramp up your 401(k) contributions, especially if you've been contributing minimally. The average 401(k) by age in your 30s should show a noticeable increase as you gain more financial stability. Many financial guidelines suggest aiming to have one times your salary saved by age 30.

• 40s: Significant Growth

• Average 401(k) by age 40s: Can expect to see averages somewhere between $120,000 to $190,000.

• The 40s are a crucial decade for retirement savings. You likely have established a career, and your earning potential may be nearing its peak. If you haven't been maximizing your 401(k) contributions, now is the time to seriously consider doing so. The impact of consistent contributions and market growth truly starts to become evident in the average 401(k) by age in your 40s. A common benchmark is to have three times your salary saved by age 40.

• 50s: Approaching Retirement with Power

• Average 401(k) by age 50s: Averages might range from $200,000 to $250,000, and sometimes significantly higher.

• As you enter your 50s, retirement may seem closer. This is a prime time to supercharge your 401(k) savings, particularly by taking advantage of catch-up contributions (more on that below). The average 401(k) by age in your 50s often reflects years of dedicated saving and the significant impact of compounding. Many experts suggest having six times your salary saved by age 50.

• 60s and Beyond: Retirement Ready?

• Average 401(k) by age 60s: Averages can vary widely, from around $200,000 to well over $250,000, with top savers having significantly more.

• For those in their 60s, the focus shifts from aggressive accumulation to preservation and distribution. The average 401(k) by age in this group indicates the culmination of a working lifetime's savings efforts. While some balances may start to decline as individuals begin drawing on their funds, robust balances are still seen. A common goal is to have eight to ten times your salary saved by age 60 to 67.

Why Do These Averages Vary So Much?

Understanding the average 401(k) by age is more nuanced than just looking at a single number. Several critical factors influence these balances:

• Contribution Rate: This is perhaps the most significant factor. How much you consistently contribute to your 401(k) directly impacts its growth. People who start early and contribute a higher percentage of their income will naturally have a higher average 401(k) by age than those who start late or contribute minimally.

• Employer Match: Many employers offer a matching contribution, essentially free money added to your 401(k). If your employer offers a match, failing to contribute enough to receive the full match is like leaving money on the table. Maximizing your employer match significantly boosts your average 401(k) by age.

• Investment Performance: The underlying investments within your 401(k) play a crucial role. A well-diversified portfolio that aligns with your risk tolerance and time horizon can generate substantial returns over time. Market fluctuations will affect the average 401(k) by age, as investment values rise and fall.

• Years in the Workforce: The longer you've been contributing to a 401(k), the more time your money has to grow through compounding. Someone who starts saving in their early 20s will have a much higher potential average 401(k) by age than someone who begins in their 40s, even if their contribution rates are similar.

• Salary and Income Growth: Higher salaries often allow for higher contribution amounts, which directly impacts the average 401(k) by age for different income brackets. As your income grows, increasing your contribution percentage can significantly accelerate your savings.

• Withdrawals and Loans: Taking loans or making early withdrawals from your 401(k) can severely derail your retirement savings progress and negatively impact your average 401(k) by age. These actions often incur penalties and miss out on future growth.

• Fees: While often overlooked, investment fees can erode your 401(k) balance over time. Understanding the fees associated with your plan and choosing low-cost investment options can help your money grow more efficiently.

• Economic Conditions: Broader economic conditions, such as market booms or downturns, can impact investment performance and, consequently, the average 401(k) by age across all groups.

Updated Jun 6th, 2025

Share this:

How Do You Compare? 401(k) Benchmarking

It's natural to want to know how your average 401(k) by age compares. While the numbers provided above are general guidelines, a more personalized benchmark involves your income. Financial experts often suggest saving a multiple of your salary by certain ages. These benchmarks are helpful for understanding if you are on a good trajectory:

• By Age 30: Aim to have 1x your annual salary saved.

• By Age 40: Aim to have 3x your annual salary saved.

• By Age 50: Aim to have 6x your annual salary saved.

• By Age 60: Aim to have 8x your annual salary saved.

• By Age 67 (Full Retirement Age): Aim to have 10x your annual salary saved.

These benchmarks provide a more tailored perspective than simply comparing your balance to the overall average 401(k) by age, as they account for your personal earning power.

Strategies to Boost Your 401(k) Savings

If your current average 401(k) by age isn't where you'd like it to be, or even if it is and you want to accelerate your progress, there are several powerful strategies you can employ:

• Automate Your Contributions: Set up automatic contributions directly from your paycheck. This "set it and forget it" approach ensures consistency and helps you avoid the temptation to spend money before you save it. Consider automatically increasing your contribution rate by 1% each year, or whenever you get a raise.

• Maximize Your Employer Match: This is arguably the easiest way to boost your 401(k). If your employer offers a match, contribute at least enough to receive the full amount. It's essentially free money that instantly increases your overall average 401(k) by age.

• Increase Your Contribution Rate (Gradually): Even a small increase in your contribution percentage can have a significant impact over time. If you can't max out your contributions right away, aim to increase them by 1% or 2% each year.

• Take Advantage of Catch-Up Contributions: Once you turn 50, the IRS allows you to make additional "catch-up" contributions to your 401(k) beyond the standard annual limit. For 2024, the regular 401(k) contribution limit is $23,000, with an additional $7,500 catch-up contribution for those age 50 and over, bringing the total to $30,500.

  For 2025, the regular limit increases to $23,500, with the catch-up remaining at $7,500, for a total of $31,000. There's an even higher catch-up for those ages 60-63 in 2025, allowing an additional $11,250 for a total of $34,750. These provisions are designed to help older workers quickly build up their average 401(k) by age before retirement.

• Diversify Your Investments: Don't put all your eggs in one basket. Ensure your 401(k) is invested in a diversified portfolio that aligns with your risk tolerance and time horizon. Consider target-date funds, which automatically adjust their asset allocation as you get closer to retirement.

• Understand and Minimize Fees: High fees can eat into your returns over time. Review your 401(k) plan's fee structure and choose lower-cost investment options when available.

• Avoid Early Withdrawals and Loans: Resist the temptation to borrow from or withdraw money from your 401(k) before retirement. Not only can you incur penalties and taxes, but you also lose out on potential long-term growth, severely impacting your eventual average 401(k) by age.

• Consider a Roth 401(k) if Offered: If your employer offers a Roth 401(k) option, consider contributing to it, especially if you believe you'll be in a higher tax bracket in retirement. Contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free.

• Review Your Plan Regularly: Periodically review your 401(k) statement, check your investment performance, and rebalance your portfolio as needed. Make sure your investment strategy still aligns with your goals and risk tolerance.

The Compounding Effect: Why Starting Early Matters

The concept of compounding is fundamental to understanding why the average 401(k) by age grows significantly over time. Compounding refers to earning returns on your initial investment and on the accumulated interest or gains from previous periods. The longer your money is invested, the more time it has to compound, leading to exponential growth.

Imagine two individuals:

• Person A starts saving $200 per month at age 25.

• Person B starts saving $200 per month at age 35.

Assuming an average annual return, Person A's 401(k) balance at retirement will be significantly higher than Person B's, even though they contributed the same monthly amount. The extra ten years of compounding for Person A makes a dramatic difference in their average 401(k) by age at retirement. This illustrates the immense value of starting early and consistently contributing to your 401(k).

Common Questions About Your 401(k)

Q: How much should I contribute to my 401(k)? A: At a minimum, contribute enough to get your employer's full match – that's essentially free money. Beyond that, financial experts often recommend saving at least 10-15% of your income for retirement, including any employer contributions. The more you can comfortably contribute, the better.

Q: What's the difference between average and median 401(k) balances? A: The "average" (mean) is calculated by adding up all the balances and dividing by the number of people. The "median" is the middle value when all balances are arranged from lowest to highest. The median can sometimes be a more accurate representation of the typical person's savings, as it's less skewed by a few extremely high balances. Both provide insights into the average 401(k) by age.

Q: Should I worry if my 401(k) is below the average for my age? A: Not necessarily. While the average 401(k) by age provides a benchmark, it's just that – a benchmark. Your individual circumstances, such as career changes, periods of unemployment, or supporting family, can affect your savings. Focus on increasing your contributions and making consistent progress rather than fixating solely on the average.

Q: Can I have more than one 401(k)? A: If you've changed jobs, you might have multiple 401(k) accounts from previous employers. You can typically leave them where they are, roll them over into your new employer's 401(k), or roll them over into an Individual Retirement Account (IRA). Consolidating your accounts can simplify management and provide a clearer picture of your overall average 401(k) by age.

Q: When can I access my 401(k) funds? A: Generally, you can't withdraw from your 401(k).

Key Takeaways

Understanding the average 401(k) by age can be a helpful guide on your retirement savings journey, but it's crucial to remember that your personal financial situation is unique. The most authoritative and informative approach to your 401(k) involves consistent contributions, maximizing employer matches, making smart investment choices, and leveraging tax advantages.

By focusing on these actionable steps, you can confidently build a robust retirement nest egg that supports your future goals, regardless of how your average 401(k) by age compares to others. Start today, stay disciplined, and watch your retirement savings grow.

Subscribe to Newsletter

Get updates on new Gold IRA posts, market news, and more.