It’s important to know, on average, how much has been saved in 401(k) accounts at different ages. While average and median statistics are crucial in this regard, such data indirectly serves us with another purpose—in pointing out disparity across different age bands, thus helping us know the facts of the juncture, it does. Here’s what 2024 data is going to show and how it impacts your strategy for retirement savings.
As of year 2024, the average and median 401(k) balances vary substantially by different age groups. The table below provides a snapshot of the average and median balances for those respective age groups.
| Age Group | Average 401(k) Balance | Median 401(k) Balance |
| Under 25 | $7,351 | $2,816 |
| 25-34 | $37,557 | $14,933 |
| 35-44 | $91,281 | $35,537 |
| 45-54 | $168,646 | $60,763 |
| 55-64 | $244,750 | $87,571 |
| 65 and older | $272,588 | $88,488 |
These numbers reveal that 401(k) balances continue to trend upwards with age, due to both the higher earning potential characteristic of older workers and the longer periods for which contributions have been made. Altogether, the average balances are biased upward by those with substantial savings, while the median balances more accurately convey the typical saver.
Contribution patterns by age group
Contribution limits are also age-based for 401(k) plans, with catch-up provisions available for persons over 50 years. Following are the contribution limits for 2024:
- Less than 50: $23,000
- 50 and above: $30,500, inclusive of a catch-up contribution for $7,500
This incentivizes older workers to save more as they approach retirement. As at 2023, the participant’s average contribution rate stood at 11.7%, a very crucial factor to the total savings come retirement age.
Impact of employer matching
It is through employer contributions that savings for retirement can grow irrevocably large. Employer matching dollars can often act as a strong incentive for workers to contribute more to their 401(k) plans. The average employer match is reported to be around 4.6% of an employee’s salary. This means that the maximization of an employer’s contribution can lead one to get huge increases in his/her retirement savings over time.
For example, a 30-year-old employee earning $60,000 contributing 10% of salary $6,000 where the employer matches 50% of contributions of up to 6%, gets an additional $1800. Alternatively, the employee contributes $7,800 during the year compared with $6,000, which is a large increment to the sum saved for retirement.
Average versus Median balance comparison
In comparing retirement balances, the difference of the average and median balances has to be taken into account. This might be skewed— average balances can be influenced by a very small number of outliers who have very large savings. For example, the average 401(k) balance for those ages 55-64 is $244,750. This includes people who have very high balances that jack up the overall average.
Median balances can be much more illustrative of what the average saver really has. For this same age group, the median balance is $87,571, demonstrating that a good portion of people have a lot less saved.
This difference really brings into perspective that people should pay more attention to their own personal savings goals and not so much to averages that probably don’t include them.
Some of the measures to ensure adequate retirement savings are:
- Start early: Start contributing to a 401(k) at the earliest possible so that it gets time to grow with compound interest.
- Maximize contributions: Contribute enough to get the full employer match since it is free money.
- Review contributions regularly: As salary increases are regular, so the contribution should also be raised aiming to at least 10-15 percent of your income.
- Utilize catch-up contributions: Maximize retirement savings through the catch-up contributions specifically for those aged 50 and older.
- Diversify investments: Ensure that the investment options for the 401(k) are diversified to minimize risk while maximizing growth.
That’s why it is important to know the average and median 401(k) account balances by age in 2024 and by comparison between these figures would enable one to work out the best saving strategies toward attaining a safe future financially into their retirement.
