The Typical 401(k) Savings Amount for Individuals Aged 55 to 64
Planning for retirement is a personal journey, and your objectives may diverge from those of your peers at a similar age. Nevertheless, it can be valuable to gain insights into the average American's retirement savings scenario.
Let's delve into the typical 401(k) balances for individuals nearing retirement, along with a simple yet effective strategy to boost your savings.
The Average American's Savings Might Surprise You
Vanguard, a renowned financial service provider, recently published its 2024 "How America Saves" report. The report offers a glimpse into the financial well-being of the average American, including the average and median 401(k) balances among Vanguard retirement account participants.
So, what does the typical 401(k) balance look like for individuals aged 55 to 64? The average balance stands at a impressive $244,750. However, the median figure, which represents the middle value where half have saved more and half less, paints a different picture: a median 401(k) balance of $87,571[1][2].
The Straightforward Trick to Save More
While $87,571 is a substantial savings figure, it might only sustain a few years in retirement for most individuals. If you find yourself lagging behind on your savings, here's an easy yet highly effective method to boost your savings: maximize your company's 401(k) match.
Among the most common types of 401(k) matches is one that offers 50% of a worker's contributions, up to 6% of their annual salary. This translates to thousands of dollars in additional savings each year. If you're not contributing enough to claim the full match, you are essentially leaving free money on the table.
Navigating retirement savings can be challenging, but small steps can make it less daunting. With the right approach, you might save more than you anticipated.
[1] "How America Saves 2024: Data Book." Vanguard. 2024. https://institutional.vanguard.com/us/insights/articles/how-america-saves-2024-data-book[2] "How America Saves 2024: Analysis." Vanguard. 2024. https://institutional.vanguard.com/us/insights/articles/how-america-saves-2024-analysis[5] "Vanguard Releases 'How America Saves' Report, Finds Median Retirement Savings of $87,571 for Americans Age 55-64." Vanguard. 2024. https://media.vanguard.com/news/how-america-saves-2024-report
- The 2024 "How America Saves" report, published by Vanguard, reveals that the average 401(k) balance for individuals aged 55 to 64 is an impressive $244,750.
- However, the median 401(k) balance, which represents the middle value, is significantly lower at $87,571, according to the same report.
- To boost your savings before retirement, consider maximizing your company's 401(k) match, especially if it offers 50% of your contributions up to 6% of your annual salary, as this can result in thousands of dollars in additional savings each year.
- Gaining insights from reports like Vanguard's 2024 "How America Saves" can help individuals plan their retirement finances more effectively, even if their savings goals may differ from the average.
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