The average 401(k) balance by age (2024)

Key points

• A 401(k) is a retirement savings plan that may come with an employer match.
• Your age and job tenure may affect how much you save for retirement.
• There are steps you can take to get back on track with your retirement savings.

Saving for retirement is a marathon. And the earlier you start, the better off you’ll generally be.

One of the most popular ways to save for retirement is through a 401(k) plan. The amount you need to save is personal and depends on a variety of factors, including your income, your lifestyle and your goals for retirement.

But knowing what others your age have saved in their 401(k)s may provide a benchmark for your own savings. Once you learn the average 401(k) balance by age, you can use it to guide your efforts and catch up if you’re behind.

What’s a 401(k) in a nutshell?

“A 401(k) plan is an employer-provided retirement saving plan with some tax advantages,” said Cassandra Kirby, a certified financial planner and wealth advisor at Braun-Bostich & Associates. “Typically there is an employer match, which is a really nice incentive.”

The employer match may come in the form of a percentage of your income. For example, a 100% match of up to 5% of a $60,000 salary would be a maximum of $3,000 per year. That assumes you put 5% of your income toward your 401(k), of course.

401(k) contributions are automatically funneled from your paycheck to your account. Generally, you can deduct those contributions from your taxable income. But you have to pay taxes on withdrawals during retirement.

When you contribute to a 401(k), your money is invested. You may choose a mutual fund or exchange-traded fund, for example. That is the key to long-term growth.

What is the average 401(k) balance by age?

Here are the latest available figures on the average balances by age, based on data from Vanguard.

Average 401(k) balance by age

You can contribute up to $23,000 per year to a 401(k) in 2024. If you started at age 18, that would come to $966,000 in contributions alone by the time you reached age 60. Of course, the likelihood that someone would be able to contribute that much right after high school is low, and not everyone can max out their contributions each year.

Average 401(k) balance by job tenure

Your job tenure may also impact how much you’re able to save, according to Vanguard data.

Average 401(k) balance by job tenure

According to Tim Mazanec, a certified financial planner at wealth management firm The Harvest Group Wealth Management, “One way to understand how much one’s 401(k) balance may be at any given age would be to run through an illustration. Everyone is going to be in a unique position and will have differing abilities to contribute to 401(k) plans, but the following math may act as a guide for some.”

Mazanec provided the following example.

Assume an individual begins contributing to a 401(k) plan at 22 years old. They have a starting salary of $40,000 and receive 3% annual salary increases. They contribute 6% of their salary to the retirement plan, and their employer contributes a full 3% match. The annual rate of return is 6%.

• At age 32, their balance would be approximately $63,000.
• At age 42, the balance would grow to approximately $190,000.
• At age 52, the balance would grow to approximately $444,000.
• At age 62, the balance would grow to approximately $869,000.

If this individual did not receive an employer match throughout their career, their 401(k) balance at age 62 would be approximately $580,000, or lower by one-third.

“Not everyone is going to be able to contribute to a 401(k) plan each year,” Mazanec added. “People change jobs, lose jobs, can be financially strained, and may have parental or other duties that preclude them from contributing. This scenario is for illustration purposes only.”

These figures might look daunting. But it’s important to remember they aren’t how much someone saved out of their own pocket. These numbers also include investment growth and employer matches.

What happens when you’re behind with contributions

There are limits to how much you can contribute to a 401(k). But they are quite generous compared with other types of retirement accounts, including individual retirement accounts. If you feel like you’re behind in saving for retirement, there is a solid opportunity to make headway by upping your contributions. There are other tactics you can use too.

“One really important thing is that you always contribute up to the match; otherwise, you’re leaving money on the table,” Kirby said.

Some employers make it automatic when you’re hired, she added, meaning you have to opt out rather than opt in. If you aren’t sure whether you’re taking advantage of an employer match, it’s worth looking into.

Setting a budget can help you figure out where you might be able to cut back if you’re having trouble finding the money to contribute to your 401(k). Taking advantage of automation is another good idea.

“Sometimes you can enroll where every year your savings goes up 1%. It’s kind of like set it and forget it. That can be helpful,” Kirby said. She also notes that you should revisit your 401(k) contributions every time you get a raise to ensure they scale with your income.

Tip: If you are 50 or older, you can contribute an additional $7,500 to your 401(k) in 2024. That means you can contribute a total of $30,500 to your 401(k) in 2024 ($23,000 standard limit + $7,500 catch-up contribution = $30,500).

Some savers also have the opportunity to make full IRA contributions, which are $7,000, or $8,000 if you’re 50 or older, in 2024. That way, you can take advantage of an employer match with your 401(k) while socking away extra money for retirement in an IRA. There are two main IRA types, and each has its own set of rules regarding income limits.

1. Roth IRAs

There are income limits for Roth IRA contributions, which are made with after-tax dollars. The contribution limit of $7,000 still applies but phases out the higher your income is.

• If you are married filing jointly or a qualifying widow(er): You can make a full contribution if your income is below $230,000 and a partial contribution if your income is below $240,000.
• If you are single, head of household, or married filing separately and did not live with your spouse during the year: You can make a full contribution if your income is below $146,000 and a partial contribution if your income is below $161,000.
• If you are married filing separately and lived with your spouse during the year: You can make a partial contribution if your income is below $10,000.

2. Traditional IRAs

There are no income limits for traditional IRA contributions, which are made on a pretax basis. However, there are income limits for how much of your contributions will be tax deductible. These income limits also depend on whether you or your spouse has access to a workplace retirement plan.

• Retirement plan at work: Your tax deduction may be limited if you (or your spouse) are covered by a retirement plan at work and your income exceeds certain levels.
• No retirement plan at work: Your tax deduction is allowed in full if you (and your spouse) aren’t covered by a retirement plan at work.

How much do you need to retire?

Like most aspects of personal finance, the amount you’ll need to support yourself in retirement varies depending on your circ*mstances.

“Aiming to save 20% of your gross income is a good starting place for savings,” Kirby said.

Some of the factors she said you’ll likely want to consider when figuring out how much money you need to retire are:

• Lifestyle: How do you want to live in retirement? Do you want to maintain your current lifestyle? If so, how much do you earn right now? Do you plan to downsize and live on less?
• Time frame: How long do you have to let your savings grow? The longer the time frame, the more opportunity there is.
• Risk tolerance: How you invest your 401(k) funds will depend on your risk tolerance. The more risk you assume, the greater your potential gains — and your potential losses.
• Other financial goals: Do you want to pay off your mortgage by the time you retire so you don’t have that payment in retirement? Do you want to put your kids through college debt-free? These kinds of goals will factor into your savings decisions.