This Is the Average 401(k) Balance After Investing for 5 Years

Thinking about quizzing your friends and family on their 401(k) plan balances? Doing so could help you evaluate your own retirement savings efforts, but it could also create some social tensions in the process of asking.

Fortunately, there is an alternative that will let you make some comparisons anonymously. Financial company Fidelity recently published a retirement savings trends report that shares data on how people are preparing for their senior years. Two data points from the report stand out:

The average 401(k) balance across all savers who've invested continuously for five years is $267,000.
The average 401(k) balance specifically for Gen Z savers who've invested continuously for five years is $23,900.

Image source: Getty Images.

Looking at those two numbers, you might think Gen Z savers are lagging. What's interesting is that the opposite may be true. Let's dive into what these average savings balances mean and what you can do if you're behind, or ahead of, the savings curve.

Time can be more powerful than money

The oldest Gen Z savers are 24, and age is where their advantage lies. Take a look at the table below. There are two scenarios: a 24-year-old with a 401(k) balance of $23,900 and a 55-year-old with $267,000 on hand. As you can see, the younger saver is richer at retirement, despite the lower starting balance and monthly contribution.

Starting Balance

Starting Age

Monthly Contribution

Balance at Age 65




$1.08 million





Data source: Author calculations via

There are two assumptions baked into the numbers above:

Both 401(k)s are growing at an average annual rate of 7%. This is in line with the long-term growth rate of the stock market.
Monthly contributions assume a 10% contribution rate and average salaries, as reported by the U.S. Bureau of Labor Statistics. Gen Z workers aged 16 to 24 earn $625 weekly on average, while workers aged 55 and over earn $1,110 weekly on average. If the Gen Z saver increases contributions along with annual raises, the ending balance would be higher than $1.08 million.

If time isn't on your side

That table data looks promising if you're in your early 20s. But it doesn't spell disaster if you're well past 24 and unhappy with your 401(k) balance. Don't despair — you still have time to course-correct, as long as you take action now. The longer you delay, the harder it will be to increase your savings significantly.

Two moves you can take to build the retirement you want are:

Raise your contributions. Even if your budget is tight, find a way to save and invest more. Plan on increasing your contributions again at your next pay raise.
Make sure you're investing aggressively enough for your age. The rule of 110 can help you find the right amount of risk for your 401(k) investments. To use the rule, subtract your age from 110. The answer is the percentage of your 401(k) to invest in stock funds. Put the remainder in Treasury bonds.

If you're ahead of the savings curve

If you feel good about your savings balance today compared to the averages, congratulations: You're moving toward a comfortable retirement. Stay on that path with these two strategies:

Build an emergency fund. A cash savings balance is your insurance against financial emergencies. Without cash on hand, you might end up charging surprise expenses to a credit card or taking a loan from your 401(k). A high credit card balance can cut into your savings budget. And a 401(k) loan would be a major savings setback.
Maintain your savings momentum. Make your monthly 401(k) contributions a non-negotiable part of your budget. If you have the chance to increase your contributions, do it.

Use the time you have

Saving for retirement isn't a competitive sport. In other words, what your friends or the average saver has amassed in their 401(k)s may not apply to you.

The comparisons are interesting, but you're better off focusing on the choices you make. No matter where you are with your 401(k) balance, you can commit to saving and investing, now and going forward. That's a powerful choice, sure to result in a bigger nest egg at retirement.

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