Average 401(k) Balance Reaches $148,153, But Your Savings May Vary by Age

According to a recent Vanguard report, the average 401(k) balance last year was $148,153, with a median of $38,176. The average and median balances vary by age range, with the youngest group having the lowest average balance of $6,899. While individual savings goals differ, comparing your account balance to the average can be helpful. To boost your savings, consider contributing more to your 401(k) to potentially increase your savings by hundreds of thousands of dollars.

According to a recent Vanguard report, the average 401(k) balance last year was $148,153, with a median of $38,176. The average and median balances vary by age range, with the youngest group having the lowest average balance of $6,899 [2]. While individual savings goals differ, comparing your account balance to the average can be helpful. To boost your savings, consider contributing more to your 401(k) to potentially increase your savings by hundreds of thousands of dollars.

One of the most effective ways to enhance your 401(k) savings is to take full advantage of your employer's match. A study by the Plan Sponsor Council of America found that 98% of employers offer 401(k) matching contributions [1]. By contributing up to the match limit, you can significantly increase your retirement savings. For instance, if your employer matches 5% of your salary, contributing the same amount could double your savings.

Moreover, contributing more to your 401(k) regularly can also make a substantial difference. A small increase in contributions can lead to significant growth over time. For example, if you earn an 8% annual return and contribute $300 more per year to earn the full employer match, you could increase your total savings by over $150,000 over a career [2].

Additionally, investing in a diversified portfolio with a higher weighting in stocks when you're younger can also boost your returns. Using target-date funds that automatically adjust your asset allocation can simplify this process and help you achieve a better long-term outcome.

In conclusion, maximizing your 401(k) employer match, contributing regularly, and investing in a diversified portfolio can significantly enhance your retirement savings. By taking these steps, you can potentially increase your 401(k) balance by hundreds of thousands of dollars over time.

References:
[1] https://www.nasdaq.com/articles/1-change-could-increase-your-401k-balance-thousands-over-time
[2] https://finance.yahoo.com/news/average-401-k-balance-last-220000830.html