Key Points
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It can be difficult to know how much you need to save for retirement.
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There’s no one right answer, but publicly available data can serve as a guide.
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Even this data must be evaluated in the context of your personal situation.
The 401(k) account is one of the most common retirement savings accounts that employers offer their workers. Employees are able to contribute pre-tax dollars to these accounts and invest them tax-deferred. Only when withdrawals are made do the account holders pay taxes at their ordinary tax rate.
Employers have the option to offer some kind of matching contribution, usually up to a set percentage of each employee’s salary. Employer contributions are deductible up to a certain point.
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With everyone making different salaries and employers having different policies for their 401(k) plans, it’s natural for workers to wonder how much they should save as they approach retirement. While there is no single right answer, available data can help you gauge where you stand.
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The average 401(k) balance for retirees age 60 and older
While several companies provide data on the average 401(k) balance, I like to use Fidelity when I can, given the company’s size and reputation in the space.
At the end of 2024, Fidelity looked at 401(k) data from 26,700 corporate defined contribution plans that included 24.5 million participants. The company found that the average 401(k) balance was $246,500 for ages 60 to 64, $251,400 for ages 65 to 69, and $250,000 for ages 70 and over.
Fidelity actually recommends saving much more than this amount. In prior articles, the company has suggested having eight times your annual salary by age 60 and 10 times your annual salary by age 67. With median annual earnings for a full-time U.S. worker above $50,000, Fidelity’s recommendation is far higher than the approximately $250,000 average balance for its plan participants near retirement.
But again, there’s always a difference between advice and reality. Retirees should also understand that an average number among tens of millions of people captures so many different scenarios. Ultimately, retirees should think about the lifestyle they want in retirement and work with a financial advisor or on their own to determine how much they need to support that lifestyle.
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