Average 401(k) Savings by Age

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A question I am asked frequently when discussing retirement; how much should I have saved?  Some “experts” claim you need to replace 80% of your pre-retirement income, while other marketing campaigns by financial services companies want us to believe that we need close to $1 million or even more.

The true answer to this question is that it depends.  Every situation is different in the following ways:

  • Many individuals have pensions to supplement their retirement income.
  • Most enter retirement debt free and have lower expenses compared to when they were working.
  • Retirees typically have larger than usual cash savings built up in anticipation for retirement.
  • Some individuals are extremely frugal while others spend more freely in retirement.
  • Work, at least part-time continues for many of us.
  • We cannot anticipate how long we will be in retirement, and health care needs vary by person.

A good rule of thumb is drawing 3-5% from investment accounts.  So if you have $300,000 saved, taking $9,000 – $15,000 per year is considered a recommended withdrawal rate to sustain the investment accounts for many years in retirement.  That said, here are the average balances by age, reported from Fidelity for 401(k) plan participants as of March 31st, 2019:

Ages 20-29: $11,800
Ages 30-39: $42,400
Ages 40-49: $102,700
Ages 50-59: $174,100
Ages 60-69: $195,500
Ages 70+: $182,100

Note: Data based on more than 30 million Fidelity Investments retirement accounts.
Source: Fidelity Investments; Q1 2019