How Much Should You Have in Your 401(k) by Different Ages?
Author: Siân Killingsworth / 3 Jun 2020 / 401(k) Resources

Wondering how your retirement savings stack up? Most financial planners recommend setting aside 15 to 20 percent of your gross income into a 401(k) plan, IRA, Roth IRA, and/or tax-advantaged account.
It’s important to remember that it’s never too late–or too soon to start saving for the future. The earlier you begin planning for retirement, the better, but you can always catch up in later years if necessary.
What is the average retirement savings?
American 401(k) balances are up due to asset performance and increased contributions. Naturally, those in their sixties have the highest balances, but the “average” plan balance was up to $106,000 in 2019.
On the other hand, a Bankrate survey of 1,000 people found:
- 21%, or one in five Americans, don’t save any of their annual income for retirement.
- 20% save 5 percent or less of their income.
- 28% save 6 to 10 percent of their income.
- 16% save the recommended 15 percent or more for retirement.
Are you ready for retirement?
Comparing 401(k) balance averages won’t necessarily tell you much about your own retirement readiness. Breaking down the numbers by age group is more helpful, as 401(k) balances increase considerably with age.
How much should you have in your 401(k) by different ages?
Twenties
- Average 401(k) balance: $11,800
- Median 401(k) balance: $4,300
- Percentage of income: 7%
Thirties
- Average 401(k) balance: $42,400
- Median 401(k) balance: $16,500
- Percentage of income: 7.8%
Forties
- Average 401(k) balance: $102,700
- Median 401(k) balance: $36,000
- Percentage of income: 8.5%
Fifties
- Average 401(k) balance: $174,100
- Median 401(k) balance: $60,900
- Percentage of income: 10.1%
Sixties
- Average 401(k) balance: $195,500
- Median 401(k) balance: $62,000
- Percentage of income: 11.2%
Are you saving enough?
Your 401(k) savings goals based on age might look something like this:
- Save half your annual salary by age 30. (So, if you earn $50,000, aim for $25,000 saved by 30.)
- Save twice your annual salary by age 40. (So, if you earn $50,000, aim for $100,000 saved by 40.)
- Save four times your salary by age 50. (So, if you earn $50,000, aim for $200,000 saved by 50.)
- Save six times your salary by age 60. (So, if you earn $50,000, aim for $300,000 saved by 60.)
- Save eight times your salary by age 67. (So, if you earn $50,000, aim for $400,000 saved by 67.)
Ideally, you will have increased your salary with raises, bonuses, and promotions over the years.
The 80% Rule
To live comfortably after you retire, experts recommend planning on having 80% of your current salary per year for 20 years. This may sound like a huge sum, but it doesn’t only include your personal savings in 401(k)s and IRAs; it also includes your company pension and social security benefits.
Most people plan for Social Security benefits to replace about 33 percent of their wages. Pensions may account for another 20 percent of your income. Personal earnings, assets, and investments account for the remaining half.
The reason it’s not the “100% rule” is that, feasibly, some of your expenses will reduce or disappear entirely. For instance, you won’t use as much gasoline or spend as much for auto maintenance without the daily commute. You won’t be contributing to your retirement savings anymore, and perhaps you have paid your mortgage off already.
Some situations where you may require more than 80% include:
- You plan to travel extensively.
- You have expensive hobbies.
- You want to retire before 65.
- Your family tends to live well into their 90s.
- You won’t be able to maintain health insurance through an employer.
On the other hand, you may need less than 80% in retirement if:
- You have always had a large savings nest egg and live happily on a modest budget.
- Your house, automobile, student loans, and credit card debts are fully paid off.
- You plan to live a simpler, scaled-down lifestyle in retirement by downsizing to a smaller home.
Still fuzzy on the math? Try the Ubiquity 401(k) calculator for estimations made easy!