The Average 401(k) Balance for a 50-Year-Old May Surprise You. How Do You Compare? | Global News Avenue

Once you hit 50, there’s a good chance you’ve been saving money for years, even decades. But at this age, how much should you save? Everyone’s financial situation is unique, which can make it difficult to determine the ideal amount you should save. However, understanding how your colleagues are performing can help you determine whether you are on the right path.

2023, retirement plan According to Vanguard Group’s annual “How America Saves” report, participants ages 45 to 54 had an average balance of $168,646 and a median balance of $60,763.

Average 401(k) at age 50

Vanguard, Fidelity and Empower periodic reports Average retirement account balance by agebut they all report different numbers. Here’s what they found:

• Vanguard’s 2023 report shows the average balance for retirement plan participants ages 45 to 54 is $168,646. The median (half of savers have more in their accounts and half have less) is significantly lower at $60,763.
• Using financial management tool data as of December 31, 2024, Empower reports that on average 401(k) balance Those in their 50s had a balance of $592,285, while the median balance was $252,850.
• Fidelity Investments said in its “Building Financial Futures” presentation released in the third quarter of 2024, Generation X— for those born between 1965 and 1980, including those aged 50 years old — is $191,900.

How much retirement savings you should have at age 50

The amount of money you should have saved by age 50 depends on your goals and lifestyle. However, there are some general guidelines you can follow. Fidelity recommends saving six times your salary by age 50, And T. Rowe Price recommends increasing pre-retirement income by three and a half to six times total revenue Saved.

When you turn 50, retirement is (ideally) around the corner, so now is a good time to consider the 80% rule. This rule suggests that your goal should be to save enough to replace 80% of your money by retirement. For example, if your salary is $80,000, you want to save $64,000 per year in retirement to maintain your lifestyle. one financial advisor It can also help determine how much you need to save based on your specific financial situation and goals.

Tips to Increase Your Retirement Savings

If you’re in your 50s and worried about falling behind on your retirement savings, you’re not alone. About 20% of adults age 50 and older have no retirement savings, and 61% are worried they won’t have any. Enough money to support them in retirement, According to a 2024 survey released by the American Association of Retired Persons (AARP). If you’re worried, here are three tips to supplement your retirement savings.

• Maximize your 401(k). If your employer offers a retirement savings plan, take advantage of it. Employer-sponsored retirement savings accounts have tax advantages and, in most cases, a company match. Even if you are late, Maximize your 401(k) Every year can make a big difference for the rest of your working life.
• Donate to a Roth IRA. one Roth IRA (IRA) allows you to save after-tax funds that you can withdraw tax-free in retirement. As long as your Modified Adjusted Gross Income (MAGI) You can contribute to these in addition to your 401(k), up to limits set by the IRS.
• Leverage your home equity. Homes are more than just a place to live: they can also provide liquidity for retirement. one Home Equity Line of Credit (Hurlock), home equity loanand reverse mortgage is a popular strategy for generating income from your house.

bottom line

How much you should have saved by age 50 depends on your personal financial situation, goals and lifestyle. However, saving three and a half to six times your total pre-retirement income is a good benchmark. If you’re late to saving, consider maxing out your 401(k), contributing to a Roth IRA, and exploring options for tapping into your home equity.