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The Average 401(k) Balance By Age

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Doug Carey

Key Points 

  • Average household financial assets are around $70,000.

  • Average household retirement assets are around $24,000.

  • Neither of those numbers are close to adequate for most people.

  • You can get your retirement savings on track with target-date funds, by programmatically increasing your 401(k) contributions each year, and in other ways. WealthTrace can help. 

How does your retirement savings compare with that of people your age? 

Looking For The Answer: How Much Do People Have In Their 401(k) Plans?

Tracking down this data is tricky and requires a little bit of extraction and interpretation, so what we end up with is an estimate. Let's start with retirement assets as a whole. According to the Investment Company Institute (ICI), household retirement assets (including pensions, IRAs, and 401(k) plans) made up about 34% of total household financial assets as of the end of 2015.

 Breakdown of retirement assets vs. other assets

Source: "The U.S. Retirement Market, Fourth Quarter 2015" [xls], Investment Company Institute


That doesn't sound too bad until you see the dollar figures. 

The good news from ICI is that total household retirement assets are, on average, higher than they have ever been. The bad news is that average household retirement assets are only in the $24,000 range, meaning total household financial assets are only in the $70,000 range. 

Now, that number is across age ranges, and the ICI unfortunately does not break down their figures by age. Presumably it includes young people just getting started in the work force, couples toward the end of their working lives thinking about retiring themselves, and everyone in between. So it's not all that useful a figure. Even so, it seems very low as an average.

Vanguard's Take

Another set of data we have is from Vanguard, which publishes 401(k) balances of accounts held at Vanguard.


401(k) balance by age group

Source: "How America Saves 2015" [pdf], The Vanguard Group


Vanguard, helpfully, does break the numbers down by age group. The trends here look very much like what you would expect: Younger people have smaller balances, and older people have larger balances. As you would also expect, the average balance (the total assets divided by the number of participants) is higher than the median balance (the account balance of the participant exactly halfway down the list of participants). Still, the difference between the average and median looks pretty extreme to us. 

A few caveats about the Vanguard data. First, it's by participant, not by household, like the ICI data is. So a couple who both have jobs and are both saving for retirement would be underrepresented here. Second, it's 401(k) data only--it does not include other forms of retirement savings. Third, it's Vanguard-only data, meaning it only counts people whose employers are wise enough to choose Vanguard as their 401(k) provider (and if you happen to have Vanguard running your 401(k) plan, congratulations--you could do far worse). We're not sure how much to read into that last point. Employees don't have much input on who their employer chooses as a 401(k) provider, and we don't have any reason to think Vanguard 401(k) balances would be higher or lower than anywhere else.

Don't Stop Now

We don't want you to look at these numbers and feel better about yourself if you're doing better than people in your age group. You might be, say, 45 years old and looking at the Vanguard figures and thinking, "I've got $200,000 in my 401(k), I'm set." But don't pat yourself on the back just yet. These numbers are lower than they should be across the board. 

Of course in a real-world situation, there would be many more factors to consider in estimating a person's retirement readiness beyond their 401(k) balance. On the positive side, a person could have a large IRA balance, or very low living expenses; on the negative side, they might have huge consumer debt. You can use a free trial of our Personal Financial Planner to figure out where you stand financially. 

Regardless, retirement readiness planning arguably starts with a well-funded defined contribution plan like a 401(k). What can you do to get your contributions on track? Here are a few ideas: 

  • Meet your match. At the very least, you should be contributing as much as your employer matches. Some employers match up to a certain percentage--say, 5% of your salary--dollar for dollar. If you don't contribute at least that much, you're literally saying no to free money.


  • Pick a percent. Now, take that 5%, or whatever it is, and increase it by a percentage point each year--or even twice a year. Put a reminder on your calendar to log in to your plan provider's web site and bump up the contributions regularly. Combined with (hopefully also regular) salary increases, your 401(k) contributions should ramp up nicely over time, and without hitting your wallet too hard. Ideally, you would eventually get to the point where you are maxing out your 401(k) contributions.


  • Target-date funds. Does your 401(k) plan offer target-date funds? There's a good chance it does. Target-date funds, which give you the ability to choose a single fund that will invest appropriately throughout your life based on when you expect to retire, remove any remaining excuse to procrastinate in getting your 401(k) set up. With target-date funds, you no longer have to wade through a bewildering list of investment options, decide how much to contribute to each, or worry about rebalancing among several funds. Just one fund and done.

Be Programmatic About This

WealthTrace can help you reboot your retirement savings. Our program is designed to help you plan all aspects of retirement and the years leading up to it, from saving and spending to goals and heirs. WealthTrace can handle it all, in a comprehensive, easy-to-understand interface. (Sign up for a free trial if you haven't yet.) 

Specific to a 401(k), WealthTrace can also run through some what-if scenarios to see just how changes to some of the items above could affect your retirement plan. For example, you might get a plan entered into WealthTrace just the way you want it, but then wonder, "What happens if I boost my 401(k) contributions a little bit? How much earlier could I retire?" 

With WealthTrace, you can put your plan through its paces with our What-If Scenarios functionality. In the case below, a few thousand dollars more stashed away in a 401(k) each year pushed the probability of funding all of this couple's goals from 80% to 90%.

 WealthTrace What-If Scenarios


Get Motivated And Get Moving

Actually seeing the numbers like this can be pretty motivating. Whatever works for you--the key is to get into the right habits. Because once you do, there's a good chance those habits will stick. 

For a detailed, accurate look at your retirement situation, complete with the ability to enter multiple what-if scenarios, sign up for a free trial of WealthTrace.

Do you want free tips on how to retire early? How about retiring stress-free? Learn how to make sure you do not outlive your money by signing up for our free articles.

Pic of me 2
Doug Carey