Personal Finance

How does Your 401(k) Compare to the Average?

Christy Bieber

Published: February 25, 2025 1:15 pm

Is your 401(k) account balance above average or below average? This is a helpful thing to know because it can give you insight into whether you are doing better than your peers when it comes to retirement savings or whether you are off track and need to make some big changes to your savings rate. 

Fortunately, there is plenty of data that shows the amount others have saved. You can check out the numbers below to see how your 401(k) compares and also get some tips on increasing your savings rate so you can retire with more money than many of your fellow Americans and have the comfortable retirement that you deserve.

This is the average 401(k) balance by age

According to Vanguard’s How America Saves, report, here are the median and average 401(k) account balances for people of different age groups. These are the balances among all of the Vanguard defined contribution plans.

The median balance is much lower than the average, of course, which is because there are some people who have a lot of money in 401(k) accounts. Sadly, both the average and median balances don’t leave most people with enough saved though. For those who are 65 and over, the ideal target is to have around 10 times your final salary saved so you have a big enough nest egg to support you.

Sadly, these amounts are far short of this. When applying the 3.7% rule for a safe withdrawal rate, it’s clear that many retirees are simply not going to have the income they need for a secure future.  A nest egg of $88,488, for example, would only provide $3,274.06 in income per year.

This means the goal for most people should be to end up with a 401(k) that is far bigger than average.

How to make sure your 401(k) balance is big enough

If you want to ensure you can enjoy retirement instead of spending your later years worrying about money, you should take steps to make sure your 401(k) balance ends up big enough. To do this:

• Decide on an investment target. As mentioned above, 10 times your salary is a good rule of thumb although you may want to work with a financial advisor to make a more personalized plan. 
• Choose a target retirement age. Think about when you want to retire. An earlier retirement means your savings must support you for longer and you have less time to grow it, so will need to invest more aggressively. 
• Determine what you need to save each month. The calculators at Investor.gov can give you insight into how much to save each month once you put in your savings target and your desired timeline, along with estimating your ROI. 
• Set up automatic contributions to your 401(k). If you decide that you must save $300 per month, automate your contributions so this amount comes out of your paycheck. Be sure to take your 401(k) match into account too as this will help you save enough — and you want to max out your match to avoid giving up free money.
• Invest wisely. You need to have a diverse portfolio of assets you want to hold long-term.

By taking these steps, your balance should end up above average and you can be far more prepared for retirement than your peers.