Oct 11, 2024
According to recent research from Fidelity Investments based on 26,100 corporate defined contribution plans and 24 million participants, the average 401(k) balance is $127,100.
That number doesn't tell the whole story, though. Some age groups have a whole lot more invested than others — which is expected since older Americans have had more time to save.
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Just how do 401(k) balances compare by age? Let's take a look at what different generations have set aside for retirement so you can see how your own account balance stacks up.
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This is the average 401(k) balance for every age group
According to Fidelity's data from the second quarter of 2024, here is the average 401(k) balance for people of different ages:
- Gen Z: $12,000
- Millennials: $62,000
- Gen X: $182,100
- Boomers: $242,200
This is up considerably across every age group compared with Fidelity's data from the first quarter of 2023 reported on by CNBC. At that time, the average balances for each generation were, respectively, $7,100, $44,900, $145,500 and $215,000.
The increase reflects a long-term trend of each generation increasing their account balances — sometimes considerably. In fact, Fidelity's summary of Q2 2023 data revealed a double-digit increase in average 401(k) balances for nearly every generation over Q2 2022. Gen Z saw their balances increase by 66%, millennials by 24.5%, and Gen Xers by 14.5%. Meanwhile, boomers saw a 6.3% increase.
This is good news, but it's not entirely unexpected. Most people do see their balances go up as they grow older — both because they have more time to contribute and because they benefit from the compound growth that comes when their investments earn returns and are reinvested.
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Are Americans on track for a secure retirement future?
While it's great news that average balances are going up across every age group, the reality is that the average balances are not enough to create a secure retirement future.
Take Gen X, for example. Gen Xers were born between 1965 and 1980 and so are between the ages of 44 and 59 in 2024. The median annual income in 2024 for Americans 45 to 54 is around $68,432, according to data from the U.S. Bureau of Labor Statistics. Experts suggest having around three times your income saved by 40 and six times by 50, so the typical Gen Xer should have upwards of $205,296 to be on track for a secure future.
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A quick look at the income that boomers' accounts would produce also reveals how far behind the typical American is. Boomers are nearing retirement, if they aren't there already, and a 401(k) balance totaling $242,200 would provide only around $9,688 to spend a year at a safe withdrawal rate, assuming you followed the 4% rule.
Of course, these numbers are all just averages. Your own financial situation is what matters — not how you compare to others. Your income and retirement goals determine how much you should have saved both now and in the future.
You can use rules of thumb to set savings goals, like estimating you'll need 10 times your final income invested before retirement. Or you can use online calculators and drill down into the details, making sure your savings will produce exactly the income you desire.
Whatever approach you take, the key is to make a plan and then automate it. Decide how much to invest in your 401(k), work up to having that much taken out of your paycheck before you're paid, and avoid reducing your contributions or raiding your accounts for short-term goals. If you can do those things, you can set yourself up for the retirement you deserve.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
