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The Average 401(k) Balance for a 60-Year-Old May Surprise You. How Do You Compare?
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The amount you should contribute to your 401(k) when you turn 60 is personal. It depends on your income, lifestyle and goals. But with many Americans planning to retire in their 60s, it’s important to consider whether you’ve set aside enough money to leave work for good. knowing How much have your peers saved? Might be a useful measure.
The average balance among retirement plan participants ages 55 to 64 will be $244,750 by 2023, according to Vanguard Group’s annual “How America Saves” report. this median The amount saved (ie half saved more and half saved less) was $87,571.
Main points
- The average retirement saver between the ages of 55 and 64 saved $244,750 in a 401(k) plan in 2023, according to Vanguard. The median savings was $87,571.
- Empower found that people in their 60s have an average savings of $571,807 (median: $206,719), while Fidelity Investments said the average 401(k) balance among Generation Xers is $191,907.
- Ideally, you want to save 80% of your pre-retirement income.
Average 401(k) at age 60
Many financial services companies publish data Average 401(k) balance by ageand their numbers can vary significantly. As mentioned above, Vanguard reports numbers of $244,750 (average) and $87,571 (median), while Empower recently reported that the average 401(k) balance for people in their 60s was $571,807, with the median being $206,719 Dollar.
Meanwhile, Fidelity Investments said in its Q3 2024 “Building Financial Futures” presentation that the average balance among Gen X participants was $191,900. (Generation X consists of people born between 1965 and 1980.)
Only 67% of private industry workers, 63% of civilian workers, 47% of small business workers, and 39% of state and local government workers have access to a defined contribution retirement plan such as a 401(k). but still tax-advantaged retirement accounts You can set up an individual retirement account (IRA) for yourself.
How much retirement savings should you have at age 60?
Fidelity recommends you save at least eight times your annual salary by age 60. T. Rowe Price’s savings guide states that by age 60, you should have saved between 6 and 11 times your salary.
Another industry-wide tip is the 80% rule, which states that you should save 80% of your money. annual income before retirement Maintain a similar standard of living in retirement. For example, if you were working with a salary of $80,000, you would want to save $64,000 per year in retirement.
If you’re confused about what this all means to you? talk to a financial advisor About your specific situation and goals.
For workers over 50, you can catch up contribution The annual limit is exceeded every year. By 2025, an additional $7,500 will be added to a 401(k), 403(b), or Thrift Savings Plan; $1,000 for a Traditional or Roth IRA; and $3,500 for a SIMPLE IRA.
How to save for retirement
Many retirees and those about to retire Not saving enough for retirement. To help ensure you’re on track, follow these steps Tips for saving for retirement:
- start early: The earlier you save, the longer your investment has to grow.
- Take Advantage of Company Match: Many employers will game contribution 401(k)s and similar savings plans, up to a certain amount, such as 3%. Contribute at least an amount that matches your company so you don’t have any money left over.
- open a Individual Retirement Account (IRA): If you can’t join a workplace retirement savings plan, you can save on your own through an IRA. Even if your employer does offer a 401(k), consider supplementing your savings with an IRA or IRA Roth IRAwith different tax treatments.
- Set up automatic contributions: Whether you have a 401(k), 403(b), solo 401(k), or IRA, if you automatically transfer funds, you’ll ensure your savings keep growing.
bottom line
There are no one-size-fits-all rules for saving for retirement, but aiming to have 6 to 11 times your annual salary by age 60 can help you prepare. Start early, take advantage of any employer matches, consider an IRA, and automate savings to stay on track. If you get off track, stay positive. Any amount of savings is a good start.
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