Typical Americans may not have as much saved for retirement as they think they need.
People often question how their finances compare to others, especially regarding their 401(k) balances relative to age.
The following table highlights the median 401(k) balances across various age groups:
| Age range | Average 401(k) balance | Median 401(k) balance |
|---|---|---|
| 20s | $97,440 | $37,668 |
| 30s | $193,895 | $77,546 |
| 40s | $392,026 | $158,093 |
| 50s | $607,055 | $249,136 |
| 60s | $568,040 | $188,792 |
| 70s | $420,975 | $92,611 |
| 80s | $413,614 | $78,534 |
Data Source: Empower personal dashboard as of June 30, 2025.
What do these numbers mean?
The average and median 401(k) balances reveal significant insights. The median, which represents the middle value in a sorted list, can sometimes offer a clearer picture than the average, which may be swayed by extreme values. For instance, with a set of figures like 78, 101, 135, 204, and 712, the median would be 135, while the average is 246. Thus, the median can better represent typical savers.
Still, I can’t help but feel concerned that some averages look Ok, but it might mask the reality of not having enough for retirement. The so-called “4% rule” hints at how much one might safely withdraw from their retirement savings, which could be misleading if you don’t dig a little deeper.
This guideline suggests withdrawing 4% of your nest egg initially, adjusting for inflation afterward. Therefore, withdrawing from a balance of $568,040 would mean about $22,720 in the first year which sounds good, but…
As of July, the average annual benefit from Social Security for couples is around $24,000, bringing total income to about $46,720. This could hardly cover living expenses for many. If you’re feeling uneasy about your finances, you might want to consider postponing retirement or even delaying when you claim Social Security. Strangely enough, many reports suggest it’s often beneficial to wait until you turn 70 before making a claim.
Most retirees might be missing a significant Social Security benefit
If you’re among those who feel behind on retirement savings, you might not be aware of strategies that could enhance your Social Security benefits. One such tactic could lead to an additional $23,760 each year. Learning how to maximize Social Security can provide confidence when planning for retirement.
