The Typical 401(k) Account Wealth for Seniors Aged 60 and Above
In the world of retirement savings, the 401(k) account is a common choice for many workers. Offered by employers, these accounts allow employees to contribute pre-tax dollars, which are invested tax-deferred.
Recent findings by Fidelity, a leading provider of retirement services, shed light on the average 401(k) balances for different age groups and retirees. The data was gathered from 26,700 corporate defined contribution plans that included 24.5 million participants at the end of 2024.
For workers nearing retirement, the average 401(k) balance varies. For those aged 60 to 64, the average balance is approximately $246,500. For those aged 65 to 69, the average balance increases slightly to $251,400, and for those aged 70 and over, it remains at $250,000.
Retirees, on the other hand, have an average 401(k) balance of $250,000 for ages 60 and older. This data point can help workers gauge their retirement savings and understand where they stand in terms of their retirement savings.
However, it's important to note that the amount of savings that workers should have as they approach retirement varies and there is no single right answer. Fidelity recommends having eight times your annual salary by age 60 and 10 times your annual salary by age 67.
Employer contributions to 401(k) accounts are deductible up to a certain point. Some employers may offer matching contributions, usually up to a set percentage of each employee's salary.
Withdrawals from the 401(k) account are taxed at the account holder's ordinary tax rate. 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.
Looking towards the future, the average 401(k) account balance for age groups according to Fidelity in 2029 is approximately $325,000 for ages 55 to 60, $400,000 for ages 60 to 65, and $450,000 for ages 65 and older.
It's essential to remember that an average number among tens of millions of people captures so many different scenarios. Retirees should understand that their individual circumstances, including their unique financial goals and risk tolerance, will play a significant role in determining their ideal retirement savings.
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