The Average 401k Balance by Age Explained

Key Points

• The average American has between $80,000 and $256,000 in retirement funds by the time they reach their 60s. 
• Retirement savings goals are influenced by your lifestyle expectations and estimated post-retirement expenses.
• Investing for retirement early can help you save more and even potentially retire before the full retirement age.
• As you age, remember to shift assets from growth-oriented stocks and ETFs to more secure, stable assets like bonds. 

Have you started saving for retirement? If you don’t think your retirement savings are up to snuff, you aren’t alone. According to data from the Census Bureau, about 50% of men and women approaching retirement age do not have any money in savings. There are many reasons for this, including stagnant wages, increased costs of living, and high debt levels. But a big reason is that planning for retirement can be daunting. It is hard to determine how much money you’ll need to retire comfortably, what age you'll be able to retire, and how you'll get there.

Knowing what the average person has saved by age and how to maximize your 401(k) contributions can help you stay on track with your retirement goals. Keep reading to learn about the average 401(k) balances by age, tips for maximizing your contributions, and how to adjust your investment strategy as you get closer to retirement. Whether you're just starting to save or trying to catch up, we'll provide actionable insights to help you make the most of your 401(k) and secure your financial future.

How Much Do You Need to Retire?

There’s no one-size-fits-all answer to this question, as the amount varies depending on factors such as your desired retirement age, lifestyle expectations, and future healthcare costs. However, if you aim to retire at age 67, a general rule is to have saved ten times your annual salary by the time you decide to retire. 

Fidelity, one of the largest 401(k) providers in the United States, suggests saving specific multiples of your annual salary by different age milestones to ensure you’re on track for a secure retirement:

• By age 30: 1x your annual salary
• By age 40: 3x your annual salary
• By age 50: 6x your annual salary
• By age 60: 8x your annual salary
• By age 67: 10x your annual salary

If you want to retire early, you’ll need to invest earlier and more aggressively. You’ll also likely need to save more than ten times your income to account for more years of living on your investment income.

Be sure to consider both healthcare expenses and long-term living expenses when deciding when you can afford to retire. MarketBeat’s retirement calculator can help you see where you are in relation to your goal and what adjustments you may need to make.

How Much Should You Have in Your 401(k)?

Knowing how much you should have saved in your 401(k) by certain ages can help keep your retirement goals on track. While individual needs may vary, here’s a look at the average 401(k) balances by age according to Fidelity’s 2023 data:

Average Age	Average 401(k) Balance
20s	$17,700
30s	$56,200
40s	$124,400
50s	$212,400
60s	$239,900

How to Maximize Your 401(k) Contributions

Maximizing your 401(k) contributions doesn’t only help you retire sooner — it can also help you take advantage of tax savings and gain a sense of financial security. Use these tips to boost your contributions at any age. 

Take Advantage of Employer Match Programs

Some employers offer a 401(k) match program, matching any contributions you make to your account up to a certain percentage of your income. This is essentially free money — and all you need to do to access it is devote a portion of your earnings to retirement savings. Ask your HR representative about any retirement match programs and contribute up to the limit if possible.

Automate Contributions and Increase Annually

Set up automatic contributions to your 401(k) account to ensure you're consistently saving. Many employers offer options to automatically increase your contribution percentage annually. This “set-it-and-forget-it” strategy helps you grow your savings over time without having to manually adjust.

Don’t Check Your Balance Too Often

While it can be tempting to monitor your retirement account balance, it’s usually better to avoid checking how much money you have more than once or twice a year. The stock market naturally moves up and down throughout the year — and checking your balance too often can make it tempting to panic sell during periods of economic stress. Contribute to your account consistently to take advantage of dollar cost averaging and see more consistent growth over time. 

401(k) Investing in Your 20s

Investing in your 401(k) in your 20s gives you the biggest advantage of all: time. With decades ahead before retirement, you have more flexibility to make mistakes or invest in assets with a higher risk-reward balance. Focus on allocating a higher percentage of your 401(k) into growth-oriented stocks that have the potential for higher long-term returns.

While it can be difficult to find money to invest while simultaneously getting established in your career and paying back student loans, the power of compound interest means that small, consistent investments can result in dramatic returns by the time you reach retirement age. 

If your employer offers a 401(k) match, make sure you're contributing enough to take full advantage of it. Employer matching is essentially "free money" that can significantly boost your retirement savings over time, so contribute at least up to the match threshold to maximize your benefits.

The earlier you learn about investing, the easier it is to get started. If you’re completely new to investing and don’t know how to start, MarketBeat’s Learn articles are free crash courses in investing aimed at beginners.

401(k) Investing in Your 30s

By your 30s, your career is likely more established and you might have more disposable income, which provides an opportunity to increase your 401(k) contributions. This is a key decade for accelerating your retirement savings, and your investment strategy should begin to reflect more structure and intention. Aim to save at least 15% of your income, including any employer match.

You can still take some risks by maintaining a diversified portfolio weighted towards stocks, but it’s also a good time to think about balancing risk with more stable investments. Consider increasing your holdings in index funds and bonds, and gradually reducing the weight of high-risk stocks.

In your 30s, you may be juggling other financial priorities, such as buying a home, paying off debt, or saving for a child's education. It's important to balance these goals while still contributing to your 401(k). Consider setting up separate savings accounts or investment vehicles (like a 529 plan) to keep your retirement savings on track.

If you haven’t already, take advantage of automatic contribution increases to consistently grow your savings. Setting long-term financial goals in your 30s will help keep you on track for a secure retirement.

401(k) Investing in Your 40s

In your 40s, retirement starts to feel more tangible, and your focus should shift toward maximizing contributions and safeguarding your savings. Consider increasing your 401(k) contributions again, especially if you’re behind on savings. This is the decade to fine-tune your strategy and focus on long-term growth while preparing for a more conservative approach in the future. 

Your portfolio should balance growth and stability, so add more conservative assets like bonds or dividend-paying stocks. Reassess your retirement goals and adjust your risk tolerance accordingly. Keep an eye on fees, and opt for low-cost funds to preserve more of your returns.

401(k) Investing in Your 50s

In your 50s, retirement is on the horizon, and it’s time to focus on preserving the wealth you’ve built while continuing to grow it cautiously. This is also the time to gradually shift your portfolio toward safer investments, such as bonds or low-risk mutual funds. The goal is to reduce volatility while still allowing for growth. Consider consulting a financial advisor to ensure you’re on track to meet your retirement goals. It’s essential to have a clear picture of your financial needs in retirement and adjust your contributions accordingly.

Once you hit age 50, different contribution limits apply, and you can make additional “catch-up” contributions. Adults 50 and older can contribute an additional $7,500 to their 401(k) plans in 2024 — take advantage of these extra contributions if you can.

At this stage, you need to factor in future healthcare expenses into your retirement expenses. Consider investing in a health savings account if you’re eligible, which offers triple tax benefits and can be used for medical expenses in retirement.

401(k) Investing in Your 60s

While there’s no rule on when you have to retire, most Americans born after 1960 retire at age 67. If you’ve been maxing out your 401(k) since your 20s, it could also be possible to retire earlier — though you’ll face penalties when collecting Social Security. 

The last thing you want is to run out of money in your golden years. So, as you approach retirement, you need dto focus on protecting the savings you've accumulated. Consider shifting a large portion of your portfolio into lower-risk assets like bonds or money market funds. Develop a withdrawal strategy to ensure your 401(k) funds last throughout your retirement, and review any required minimum distributions (RMDs) to avoid penalties. 

When you reach age 60, it’s also time to decide when you’ll start taking Social Security benefits. While you can start as early as age 62, your benefits will be significantly higher if you wait until your full retirement age of 67 (or earlier if you were born before 1960). If you started investing for retirement later in life, you may want to continue working and contributing to your account until you reach age 72. This is the age when you’ll be required to begin taking minimum distributions according to current IRS rules. 

Investing for Retirement at Any Age

Your age is one of the key factors that determines your risk tolerance. So whether you’re just starting out or nearing retirement, understanding the average 401(k) balances by age and how to maximize your contributions can help you stay on track. Investing younger gives you more time to take advantage of compound interest and leaves you with more time to explore riskier assets. However, if you’re getting started investing later in life, don’t despair. With consistent contributions and utilizing multiple tax-advantaged retirement accounts, it’s still possible to retire even if you start saving in your 40s or 50s. 

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