Top 10 401k Balance
Top 10 Average 401(k) Balances in the U.S.
The average 401(k) balance varies significantly based on age, income, and years in the workforce. Below is a breakdown of how these balances look for different age groups and some insights into trends that influence retirement savings:
- Under 25:
- Average Balance: $7,351
- Median Balance: $2,816
Many young workers have just begun contributing to their retirement accounts, resulting in relatively modest balances. Early participation is encouraged, especially if an employer offers matching contributions.
- Ages 25-34:
- Average Balance: $37,557
- Median Balance: $14,933
Savings begin to accelerate as individuals progress in their careers. However, many still lag due to student loan payments and lifestyle expenses.
- Ages 35-44:
- Average Balance: $91,281
- Median Balance: $35,537
This age group shows a marked increase, with many individuals entering their peak earning years. Consistent contributions and market performance contribute to balance growth.
- Ages 45-54:
- Average Balance: $168,646
- Median Balance: $60,763
Catch-up contributions (allowed from age 50) help people in this bracket who need to accelerate their savings for retirement.
- Ages 55-64:
- Average Balance: $244,750
- Median Balance: $87,571
At this stage, workers are typically focused on maximizing savings to prepare for retirement. However, withdrawals may begin for those transitioning to part-time work or dealing with unforeseen expenses.
- Ages 65 and older:
- Average Balance: $272,588
- Median Balance: $88,488
Balances can begin to decline in this group as retirees start drawing from their accounts, although some continue contributing if still employed part-time.
Trends and Insights
The averages can be misleading since they are often skewed by a small number of high-wealth individuals. Median balances tend to provide a clearer picture, highlighting that most savers have far less than the averages suggest. Despite positive market performance and increasing contributions, many Americans still feel unprepared for retirement, with some citing a lack of financial literacy as a barrier to effective planning.
A key takeaway is the importance of starting contributions early and increasing them over time, particularly to benefit from employer matches and compounding growth. Monitoring investment fees and rebalancing portfolios periodically can also boost retirement readiness.
By focusing on long-term planning and utilizing all available tools, such as IRAs and catch-up contributions, workers can better prepare for a comfortable retirement, even if their 401(k) balances are initially low.