INSIDE: Looking for the average 401K balance by age? Here’s a simple breakdown and my analysis, as well as some tips for increasing your numbers.
I don’t know if this will make you feel better or not, but I always enjoy seeing these so I’m gonna share it around today ;)
Though as the article notes:
“No matter which number is closer to your reality — and certainly for some, both will feel out of reach — it’s important to remember that numbers like this are akin to train wrecks: They will tempt you to gawk, but they won’t likely offer you much actionable information.”
Haha yup! But it sure is fun to compare sometimes! So let’s do some gawking today and then leave the actionable stuff for tomorrow…
Here are the average 401(k) amounts by age per Nerd Wallet/NBCNews.com:
- Ages 20-29: Average 401(k) balance: $11,600. Median 401(k) balance: $4,000.
- Ages 30-39: Average 401(k) balance: $43,600. Median 401(k) balance: $16,500.
- Ages 40-49: Average 401(k) balance: $106,200. Median 401(k) balance: $36,900.
- Ages 50-59: Average 401(k) balance: $179,100. Median 401(k) balance: $62,700.
- Ages 60-69: Average 401(k) balance: $198,600. Median 401(k) balance: $63,000.
Pretty low sounding, yeah? Especially for those later years? Though I guess these #’s for the average 401K balance by age only highlight ONE fraction of our financial picture (401(k)s), and not supplemental vehicles like IRAs or cash, bonds, CDs, brokerage accounts, real estate, baseball card collections, or even bitcoin ;)
So I’ll stay positive here and just assume everyone’s Stealth Wealth game is going strong behind the scenes, haha… It’s certainly possible, right?!
Here were some other interesting clips from the article:
Ages 20-29 — “General recommendations suggest aiming for a retirement balance equal to between half and all of your annual salary by age”
I’m not one to usually follow “recommended suggestions”, especially when you don’t even mention *expenses* in the equation, however we’ll play along just for fun…
Bringing up my trusty notes on all the places I’ve worked before, it looks like I was hovering around $9/hr in my early 20s (about $17,000/year), and then closer to $78,000 as I was turning 30. So according to this rule I’d need to have anywhere from $39,000 to $78,000 saved in my 401(k) to be on track…
And interestingly enough, I’m still hovering around the $78,000 salary nearly a decade later too. Only with a much different (and mindful) lifestyle now :)
Ages 30-39 — “At this point, whether measured by the average or the median, participants have increased their balances roughly fourfold.”
Nice jump! And further proof that the first chunk is always the hardest to bank! Once you get those seeds planted it’s all about just letting time – and a little watering (contributing) – do the rest without barely a lick of effort…
In fact, it actually requires more work (mentally) *to not touch anything* than it is to grow it! Haha… Four simple words that have such a drastic impact on wealth.
Pulling up my same spreadsheet it looks like we were at $503,231.56 in 401(k) when I hit 39 (last December). Although technically these days it’s a SEP IRA since I no longer have 401(k)s being self-employed (and very much miss those FREE matches!!)
Ages 40-49 — “According to compensation research company Payscale, for women, pay tends to peak at age 39; for men, age 48.”
Can that be true??? Only 39?? I know pay discrepancy has always been a huge problem in this country/world, but damn… Never thought about *peak* salaries before.
Anyone have good insight/experience here? If you’re a woman reading this blog (whether 39 or otherwise), have you felt you’ve been stuck at your peak for a while?? What about you dudes out there? I feel like you have more control over this in the online/self-employment worlds, but maybe I’m wrong?
Ages 50-59 — “Participants age 50 and older can contribute an extra $6,000 a year in 2019. That can be a helpful Hail Mary for those feeling behind at this point, assuming that extra cash is available to put toward retirement.”
Big “if” on that last one, but yes – a great perk! As much as we all want to hit that dream of “early” retirement, there will still be some of us pushing on and doing whatever possible to help speed up the process. And banking an extra $6,000/year can quite literally pay dividends! (And a great reminder to jack it up NOW too if you’re fortunate enough to have youth so you don’t *need* to do it later if you don’t want to…)
Ages 60-69 — “Growth has slowed here, likely due to the fact that the latter half of this group may actually be drawing down their 401(k) balance to start spending the money they’ve accumulated”
Yup, sounds about right… and then the 2nd hardest thing you’ve ever had to do with your money comes in – SPEND IT!!! :) After decades (and decades) of doing everything in your power to SAVE SAVE SAVE!
At least that was my dad’s biggest concern as he was pulling the trigger a year and a half ago. But fortunately after a few months of practice he seemed to get used to it just fine ;)
Ages 70-100 — “Party time!!! Do whatever the hell you you want!!! no questions asked!”
Haha.. okay I threw that last one in, but it’s gotta be true ;) If you can’t learn to live your best life by 70 there’s no hope! We should all be so lucky to even be alive by then!!
But there you have it, anyways…. The average 401(k) balances per decade of your life.
What do you think? Pretty accurate or a complete waste of time to even talk about? ;)
You can see the full article here if you’d like: Here’s the average 401(k) balance by age, or you can jump right into the comments below and we’ll start chatting it out…
Maybe one day you’ll become a 401(k) Millionaire like our friend, Fritz? A majority of what he did was just constantly contribute and load up on all that FREE MONEY his employer kept handing out in matches! Easiest way to double your investment on the spot!
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!