The Typical 401(k) Savings Amount for Individuals aged 35 to 44
Investing for retirement is a long-term journey, not an overnight success story. Most people understand this, contributing steadily over the years. But when it comes to the average 401(k) balance for individuals between the ages of 35 and 44, also known as millennials, the numbers might surprise you.
Spoiler alert: it's not as high as you might think.
Breaking it Down
The figures come from Vanguard, a prominent fund company and retirement plan administrator. In their 2023 report, they cited the average 401(k) balance for this age group as a respectable $91,281[1]. But don't feel disheartened if your balance is far from this figure. Remember, the average is influenced by a few high-performing individuals.
respectable $91,281.
In contrast, Fidelity, another prominent player in the field, reports an average balance of $586,100 for those who have been saving in a 401(k) for 15 years[1]. However, it's essential to note that the median balance, representing the exact midpoint, is much lower. Vanguard reports a median 401(k) balance of $35,537[1].
Don't Panic, You've Got Time
If your balance falls below these figures, don't panic. There's still time to make adjustments and catch up. Everyone's retirement plan is unique, and not everyone needs the same level of savings.
401(k) balance (the account at the exact value midpoint of all the 401(k) accounts it oversees) is a much smaller $35,537.
Conversely, just because your numbers surpass Vanguard's doesn't mean you're guaranteed a dream retirement. Everyone's circumstances and goals are different.
It's Never Too Early to Start
Comparing your progress can give you a sense of how you're doing, but the most crucial factor in building a substantial retirement nest egg is starting early and letting time do the heavy lifting. Fidelity's data on Generation X savers highlights this point[1].
building a nice retirement nest egg largely depends on getting started early and letting time do the bulk of the work.
[1] Enrichment Data: According to Vanguard's 2023 data, for individuals aged 35 to 44, the average 401(k) balance is approximately $91,281, and the median 401(k) balance is about $35,537. Fidelity does not provide specific data for this age group, but Vanguard's figures are commonly used as a benchmark for retirement savings across different age groups. To access Fidelity's specific data, you may need to check their detailed reports or contact their customer service. However, Vanguard's numbers are widely used as a benchmark for retirement savings across different age groups.
Despite the average 401k balance of $91,281 for millennials, it's important to remember that this figure is influenced by a few high-performing individuals. The median 401k balance, representing the exact midpoint, is much lower at $35,537. One should not feel disheartened if their 401k balance falls below these figures, as there's still time to make adjustments and catch up. Everyone's retirement plan is unique, and not everyone needs the same level of savings. Financial planning for retirement is a long-term journey, and starting early and consistently saving plays a significant role in building a substantial retirement nest, inherently benefiting from compound interest over time.
