What’s the Average 401(k) Balance by Age?

A 401(k) is a retirement savings plan offered by many employers, allowing employees to contribute a portion of their salary on a pre-tax basis. It plays a crucial role in building a nest egg for retirement.

Analyzing the average 401(k) balances by age provides valuable insights into the retirement preparedness of individuals in different stages of their careers.

This information helps individuals gauge their progress, set goals, and make informed decisions about their retirement savings.

In this post, we will explore the factors that impact 401(k) balances, the importance of benchmarks, and delve into the average 401(k) balances by age.

Furthermore, we will discuss how these figures compare to recommended savings benchmarks and provide strategies for improving your 401(k) balance relative to the averages.

It is important to note that while averages provide useful reference points, each person's financial situation and retirement goals are unique, emphasizing the significance of individualized planning over comparisons to averages.

Understanding 401(k) Contributions

Contributions are a fundamental aspect of a 401(k) plan and play a significant role in determining the growth of your retirement savings.

Here are key points to understand about 401(k) contributions:

Employee Contributions:

As an employee, you can contribute a portion of your salary to your 401(k) account on a pre-tax basis.

The amount you contribute is deducted from your paycheck before taxes are applied, reducing your taxable income.

Many employers offer a matching contribution, which means they will contribute a certain percentage of your salary to your 401(k) account, often up to a specified limit.

Employer Contributions:

Employer contributions are an additional benefit that can boost your 401(k) balance. The employer may match a portion of your contributions, typically up to a certain percentage of your salary.

This matching contribution is essentially free money and significantly enhances your retirement savings. It's important to understand your employer's matching policy and maximize your contributions to take full advantage of any matching funds.

Factors Influencing the Growth of a 401(k) Balance:


One of the most powerful aspects of a 401(k) plan is the compounding effect. Over time, the earnings on your contributions, as well as any employer contributions and investment gains, can generate additional returns.

The longer your money stays invested, the greater the compounding effect, allowing your balance to grow exponentially.

Investment Choices:

The investment choices available within your 401(k) plan can influence the growth of your balance.

Typically, plans offer a range of investment options such as stocks, bonds, mutual funds, or target-date funds. Optimal asset allocation and prudent investment selection based on your risk tolerance and time horizon can contribute to long-term growth.


Fees associated with 401(k) plans can impact your investment returns and overall balance.

These fees may include administrative fees, investment management fees, or expense ratios. It's important to review and understand the fee structure of your 401(k) plan to ensure you're minimizing costs and maximizing your investment returns.

By understanding how contributions work and the factors that influence the growth of your 401(k) balance, you can make informed decisions about your contributions, investment choices, and fee management.

Regularly reviewing and adjusting your contributions and investment strategy can help you optimize the growth of your 401(k) account and work towards achieving your retirement goals.

Factors Impacting 401(k) Averages

When analyzing average 401(k) balances, it's important to consider the various factors that can impact these averages.

Here are some key factors to keep in mind:

Economic Conditions and Market Fluctuations:

The performance of financial markets and overall economic conditions can have a significant impact on 401(k) balances.

During periods of economic growth and favorable market conditions, account balances tend to increase. Conversely, economic downturns or market volatility can lead to declines in account balances.

Career Changes and Unemployment Periods:

Career changes, such as switching jobs or experiencing periods of unemployment, can affect 401(k) averages.

These transitions may result in changes to contribution levels, interruption of employer matching contributions, or even early withdrawals from the account. Such factors can influence the overall balance and growth of 401(k) accounts.

Withdrawal Penalties and Early Distributions:

Early withdrawals from a 401(k) account before reaching the age of 59½ generally incur a 10% early withdrawal penalty, in addition to income taxes.

Individuals facing financial hardships or unexpected expenses may opt to withdraw funds from their 401(k) prematurely, which can lower their average balance and hinder long-term growth.

Loans Against the 401(k):

Some 401(k) plans allow participants to take out loans against their account balance. While these loans can provide temporary financial relief, they come with potential drawbacks.

Loans typically need to be repaid with interest, and if not repaid within the specified timeline, they can be treated as early withdrawals, subject to penalties and taxes.

Loans against the 401(k) can impact average balances if participants choose to take advantage of this option.

It's crucial to note that these factors can contribute to fluctuations in average 401(k) balances.

However, individual circumstances and choices play a significant role in determining an individual's specific account balance.

Understanding these factors can provide insights into the broader trends and challenges that individuals face in building their retirement savings.

The Importance of Benchmarks

Benchmarks play a crucial role in evaluating the progress of your retirement savings and making informed decisions.

Here are key reasons why benchmarks are important when assessing your 401(k) and retirement goals:

Using Averages for Goal Setting:

Average 401(k) balances by age serve as useful benchmarks for goal setting. By comparing your own account balance to the average for your age group, you can assess whether you are on track, falling behind, or exceeding expectations.

Averages provide a general reference point to gauge the adequacy of your savings and adjust your contributions accordingly.

Individual vs. Average:

Unique Financial Situations and Retirement Goals: While averages provide valuable insights, it's essential to consider your unique financial situation and retirement goals.

Factors such as income, expenses, lifestyle, and desired retirement age can significantly influence the amount you need to save.

Comparing your progress to averages should be done in the context of your individual circumstances, allowing you to tailor your savings strategy to meet your specific goals.

Adjusting Strategies Based on Comparisons to Averages:

Comparing your 401(k) balance to averages can prompt adjustments to your savings and investment strategies.

If you find that your balance is below the average for your age group, it may be an indication to increase your contributions or seek higher investment returns.

Conversely, if your balance exceeds the average, you might consider allocating funds to other investment vehicles or adjusting your risk tolerance.

Benchmarks provide a basis for evaluating your progress and making informed decisions about your retirement savings.

It's important to note that benchmarks should serve as guides rather than absolute rules.

They provide a benchmark for comparison, but ultimately, your retirement plan should be tailored to your individual circumstances, goals, and risk tolerance.

Regularly reviewing your progress, reassessing your strategies, and seeking professional advice can help ensure that you are on track to meet your retirement goals.

Average 401(k) Balances by Age

Here is a breakdown of the average 401(k) balances by age, along with contributing factors:


  • Average balance: $13,900
  • Contributing factors: starting salaries, student debt, early career phase


  • Average balance: $46,000
  • Contributing factors: career progression, family responsibilities, home ownership


  • Average balance: $105,500
  • Contributing factors: peak earning years beginning, competing financial priorities


  • Average balance: $183,000
  • Contributing factors: nearing retirement, increased contribution limits, tuition for children

60s and above

  • Average balance: $232,710 – $279,997
  • Contributing factors: nearing or in retirement, RMDs (Required Minimum Distributions)

It's important to note that these figures are based on recent data and may need updating in the future. Additionally, these are just averages and individual circumstances may vary.

Comparing 401(k) Averages with Recommended Savings Benchmarks

When evaluating 401(k) averages, it's valuable to compare them with recommended savings benchmarks to gain a deeper understanding of your retirement preparedness.

Here are key points to consider when comparing average balances to recommended benchmarks:

How Average Balances Measure Up to Recommended Multiples of Salary Saved by Each Age:

Recommended savings benchmarks often suggest saving a certain multiple of your annual salary by specific age milestones.

For example, it may be recommended to have saved one to three times your salary by age 30 and three to six times your salary by age 40.

By comparing the average 401(k) balances to these benchmarks, you can assess whether you are within the recommended range or if additional efforts are needed to catch up.

Importance of Considering Social Security, Pensions, and Other Assets:

Average 401(k) balances represent just one aspect of your overall retirement picture. It's crucial to consider other sources of retirement income, such as Social Security benefits, pensions, and additional assets like individual investments or real estate.

These additional income streams can complement your 401(k) savings. Evaluating your total retirement portfolio, including both 401(k) and non-401(k) assets, provides a more comprehensive perspective on your retirement readiness.

By comparing average 401(k) balances with recommended savings benchmarks, you can assess your progress toward meeting retirement goals.

However, it's important to recognize that benchmarks are general guidelines and may not fully capture your unique circumstances.

Factors like lifestyle desired retirement age, and expected expenses can significantly impact your savings needs.

Working with a financial advisor can help you evaluate your overall retirement plan, considering both 401(k) balances and other income sources, to ensure a more accurate assessment of your retirement readiness.

Reasons for Variances in Average 401(k) Balances

Average 401(k) balances can vary significantly due to a range of factors. Here are some common reasons for variances in average 401(k) balances:

Personal Choices:

Personal choices, such as early withdrawals or taking loans against the 401(k) account, can impact average balances. These choices can reduce the overall balance and hinder long-term growth.

While there may be legitimate reasons for accessing 401(k) funds early, such as financial hardships or unexpected expenses, it's important to carefully consider the long-term implications and explore alternative solutions before making such decisions.

Economic Downturns and Market Volatility:

Economic downturns and market volatility can impact average 401(k) balances. During periods of economic recession or market downturns, investment returns may be lower, leading to slower growth in account balances.

Additionally, individuals who experienced significant investment losses during these periods may take longer to recover their balances, contributing to variations in averages.

Employment Gaps or Changes:

Employment gaps or changes can impact average 401(k) balances. During periods of unemployment, individuals may not have the opportunity to contribute to their 401(k) accounts or receive employer-matching contributions.

This can lead to lower average balances for individuals who experience employment gaps.

Additionally, changing jobs frequently can disrupt consistent contributions and potentially result in the transfer or cashing out of 401(k) accounts, affecting average balances.

Contribution Levels and Employer Matching:

The contribution levels chosen by individuals and the extent of employer matching can also contribute to variances in average 401(k) balances.

Higher contribution rates, coupled with generous employer matching policies, can lead to larger average balances.

Conversely, individuals who contribute less or work for employers with limited or no matching contributions may have lower average balances.

It's important to recognize that these factors can contribute to variations in average 401(k) balances.

However, individual circumstances and choices play a significant role in determining specific account balances.

By making informed decisions, maintaining consistent contributions, and taking advantage of employer matching, individuals can work towards building a solid retirement savings foundation.

Improving Your 401(k) Balance Relative to Averages

Here are some tips for improving your 401(k) balance relative to averages, based on different stages of your career:

For Younger Savers:

Start Early: The power of compounding makes starting early one of the most effective strategies for building a substantial 401(k) balance.

Begin contributing to your 401(k) as soon as you're eligible, even if it's a small amount. Over time, this can lead to significant growth.

Leverage Employer Matches: Take full advantage of any employer-matching contributions offered.

Employer matches are essentially free money that can significantly boost your retirement savings.

Contribute at least enough to maximize the employer match to ensure you're not leaving any potential money on the table.

Mid-Career Strategies:

Increase Contributions: As your income grows, consider increasing your 401(k) contributions.

Aim to contribute the maximum allowable amount, if possible. Even small increases in contributions can make a substantial difference in the long run.

Review Investment Choices: Regularly review and evaluate your investment choices within the 401(k) plan.

Ensure your asset allocation aligns with your risk tolerance and long-term goals. Consider diversifying your investments and periodically rebalancing your portfolio to maintain an appropriate risk level.

Late-Career and Pre-Retirement:

Conservative Allocations: As retirement approaches, consider shifting to more conservative investment allocations to protect your capital from potential market downturns. Focus on preserving the wealth you've accumulated rather than taking excessive risks.

Avoid Premature Withdrawals: Resist the temptation to withdraw funds from your 401(k) prematurely, as it can significantly impact your balance and potentially incur penalties.

Explore other sources of funds for short-term financial needs and prioritize maintaining your retirement savings.

General Strategies for All Stages:

Regularly Monitor and Adjust: Periodically review your 401(k) plan and make adjustments as needed. Stay informed about changes in investment options, fees, and contribution limits.

Seek Professional Advice: Consider consulting with a financial advisor who can provide personalized guidance based on your specific situation and goals.

An advisor can help optimize your investment strategy and ensure you're on track to meet your retirement objectives.

Remember, individual circumstances vary, and it's important to tailor your strategies to your unique financial situation and retirement goals.

By implementing these tips and staying committed to consistent contributions and prudent investment choices, you can improve your 401(k) balance relative to averages and enhance your retirement readiness.


In conclusion, understanding the averages of 401(k) balances can provide valuable insights into retirement planning.

However, it is crucial to approach these averages with a balanced perspective. While they serve as useful benchmarks for goal setting and assessing progress, it is important to remember that individual financial situations and goals vary significantly.

Retirement planning should be based on a holistic evaluation of your unique circumstances, including income, expenses, desired retirement lifestyle, and other sources of retirement income such as Social Security or pensions.

Comparing your 401(k) balance to averages should be done in the context of your individual goals and aspirations.

Rather than solely focusing on comparisons to averages, it is essential to prioritize developing a personalized retirement strategy that aligns with your specific needs and objectives.

Regularly reviewing your progress, adjusting contributions and investments as necessary, and seeking professional advice can help ensure that you are on track to meet your retirement goals.

Remember, your retirement journey is unique, and comparisons to averages should not overshadow the importance of individualized planning and decision-making.

By staying proactive, informed, and attentive to your personal financial situation, you can work towards building a 401(k) balance that supports a fulfilling and financially secure retirement.