The Average 401(k) Balance of Americans at Every Age

Moneytalksnews ^ | 09/20/2024 | Chris Kissell

[ChicagoConservative27]

Saving for retirement is a huge challenge. Knowing where you stand in comparison to peers can help to gauge whether your efforts are on track, or whether tweaking your approach is in order.

Recently, Vanguard looked at 2023 account balances by age in its defined contribution plans. Vanguard then calculated both the average balance and the median balance for each age cohort.

The average balance can be skewed by those with higher levels of wealth. So, in some ways, the median balance — the number midway between the high and the low — can be a more accurate measure of where Americans are at in terms of retirement readiness.

[GOPJ]

Chippewa Falls? Isn’t that where ‘Jack Dawson’ of Titanic fame was from?

[AppyPappy]

Two years, I was checking my online banking and I could see in my IRA about the average from the article and knew I couldn’t retire. One morning, I used my wife’s laptop using her account and I saw different numbers, about double what I could see. We met with our advisor and he told me to retire. I was due a state pension so I called my boss and gave 8 months notice. I postponed Social Security because I thought I might go back to work. I go back tomorrow but I can’t possible make enough to exceed the SS limit. Luckily, the state limits how many hours a pensioner can work by making them a wage employee.

This literally was the power of investing early in your life.

[proxy_user]

So $3 million in a regular brokerage account doesn’t count?

[Skwor]

The article is about 401k’s not diversified retirement portfolios. Yes there are many very effective ways to retire without or with limited 401k/IRA funds but let’s be honest here, the majority rely in 401k + SS to retire on.

You can pick apart my 1 million assertion all you want but in context, anyone today depending on a 401k and SS only, which is a majority of people, better have upwards close to a mill or more or they will be working part time in there retirement years eventually, or seeking some kind of aid eventually.

[Skwor]

Then you are not depending on y0ur 401k for a retirement which is kind of the premise to this thread. I never said it is the only way to retire, I am working with the premise of those would are depending on a 401K and SS only to retire, which is many folks.

[mass55th]

I worked for the County and then the State of NY, so I had to donate 3% of my earnings to the Retirement System. I never had any real savings having raised two sons alone. Never owned a home either. When the State of NY offered Deferred Compensation, not being a gambler or chance-taker, I donated some to guaranteed savings, and some in mutual funds. I can’t remember when the State began the program. All I know that when 9/11/2001 hit, like everyone else, I lost some of what I had in mutual funds. I retired two years later, and took out everything I had in it. I think I ended up with about $15,000 after taxes, and used it to pay off my car, and other bills, since I had no idea when I would be getting my first pension check.

[citizen]

I have living expenses (minimal) plus elective spending. I elect to spend very little.

I posted the caveats to this scenario earlier.

[SomeCallMeTim]

Ping

[SomeCallMeTim]

Ping

[Labyrinthos]

All —

Read the article carefully: The stats are limited to 401(k) defined contribution plans. They do not include IRAs, Roth IRSs, SEP IRAs, and most importantly, Rollover IRAs. Any person who had a 401(k) likely moves the assets to Rollover IRA when they changed jobs or retired.

For example, I am 65. My Vanguard 401(k) has a balance of ~$6,000, and that’s only because the partnership I belong to requires all partners to maintain a 401(k) account. My Rollover IRA and our Traditional IRSs, however, have a balance of ~$8 million (with $0.00 in debt).

According to the Vanguard statistics cited in the article, we are retirement poor and will have to work the rest of our lives just to survive on cat food. But based upon the value of our total portfolio, we can live on $320,000 a year plus SSI (~$70,000 per year), and never touch the principal balance.

[cgbg]

It was me as well.

However—I put away so much money in my 401k (always the maximum) for so many years that it did not matter. I had plenty of money for retirement.

I could have been a lot wealthier if more of it was in stocks—but we own our home and vehicles free and clear and have no financial stress—so no big deal.

[edhawk]

Well these don’t take into account all of those that have $0, which is a lot.

[BipolarBob]

That’s me and my brother Daryl and my other brother Darrel.

[TexasGator]

“. I never said it is the only way to retire, “

You said if one didn’t have $1 million in a 401k you would have to work at McDonalds to get by.

You led with “The truth ... “

[larrytown]

Then he got divorced...

Always seems to be part of every hard-luck tale out there, especially in these "I can't retire" stories.

Decisions have consequences.

[Skwor]

I already explained, I was speaking in context of those relying on a 401k for retirement, which was a reasonable inference within the thread. Otherwise what was the point of the thread? No need to be so obtuse about it.

[Vermont Lt]

How old are you?

I dont mean in that as “are you a child?” But If you are in your 40s, I would agree. But as someone in their 60s…I would be fine without nearly that much.

Again, the range of needs is huge.

[Diana in Wisconsin]

I haven't watched that movie in ages. The costuming alone is well worth it! Thanks for the reminder. :) 'Jack' obviously got his 'training' for the film in a Chippewa Falls, WI Winter!

[grey_whiskers]

Most MDs only make $200k-300k. But the 4% of your portfolio is greater than that without touching the principal.

Pardon my curiosity, but just what was your partnership *in*...?

[daler]

And where my grandma was born.🙂