Retiring on Social Security alone won’t be enough for most people, so it’s common to stash away money in retirement accounts like a 401(k). However, figuring out how much you need to save in a 401(k) can be tricky. Before diving into that, it might be helpful to see what others have saved as they get closer to retirement.
How does your 401(k) balance stack up against those aged 55 to 64?
Every year, Vanguard takes a look under the hood of nearly 5 million account holders and shares their savings habits in its “How America Saves” report. By the end of 2023, Vanguard found that the average 401(k) balance for those ages 55 to 64 was $244,750. That’s not too bad, especially when combined with savings in other retirement accounts.
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But if you peek at the median number, which is only $87,571, you’ll get a better sense of what’s more common. You see, the average can be skewed by accounts with a lot of money in them — like those of 401(k) millionaires. The median, however, represents the middle point in a data set. It shows that half of 401(k) holders aged 55 to 64 have saved less than $87,571.
The amount you need to have in a 401(k) right now is debatable. But if you feel like you’re behind, there are steps you can take — like socking away more money in your 401(k) or making sure you’re getting your employer match — before you close out your career for good.
Even if your 401(k) balance is higher than average, that doesn’t necessarily mean you’re on track to meet your personal needs and goals.
Your best bet is to use these numbers as a guide to help plan for your next move and set yourself up for a comfortable retirement.The $22,924 Social Security bonus most retirees completely overlook
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