Average retirement savings: Get an idea of how much to put away

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In a Nutshell

The average retirement savings by age is roughly $6,000 for individuals under 24 years old and nearly $280,000 for those 65 and older. The average retirement savings can vary greatly depending on whether or not your company provides 401(k) matching and how long you’ve been saving for retirement.
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According to a 2022 Vanguard report, the average retirement savings by age is roughly $6,000 for individuals under 24 years old and nearly $280,000 for those 65 and older.

The average retirement savings can vary greatly depending on a few factors, including whether your company provides 401(k) matching and how long you’ve been saving for retirement.

The average contribution rate is the amount both employees and employers contribute to their 401(k) as a percentage ‌of their annual salary. The median represents the typical participant’s balance — half with balances above and half falling below.

Retirement savings by age 25

  • Average: $6,264
  • Median: $1,786

Although many people younger than 25 are newer to the workforce or are not in a job offering a 401(k) plan, 56% of those eligible for a 401(k) plan are participating, according to the Vanguard study. This indicates that this generation is indeed planning for retirement early on.

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Retirement savings ages 25 to 34

  • Average: $37,211
  • Median: $14,068

From 25 to 34 years old can be a prime time to start aggressively putting money in your retirement savings since you have likely been in the workforce for a couple of years. In 2021, 81% of eligible workers in this age group participated in a 401(k)-retirement plan.

Retirement savings ages 35 to 44

  • Average: $97,020
  • Median: $36,117

If you haven’t yet started contributing to your 401(k) or just recently joined a company that offers 401(k) matching, 35 to 44 years oldmight be the time to consider investing in a 401(k) and maxing it out. 84% of eligible workers in this age group contributed to their 401(k) in 2021.

Retirement savings ages 45 to 54

  • Average: $179,200
  • Median: $61,530

When you hit your 50s, you become eligible to make larger contributions to your 401(k). The larger contribution, which includes an additional $7,500 in 2023, is sometimes called the “catch-up contribution.”

Retirement savings ages 55 to 64

  • Average: $256,244
  • Median: $89,716

In your late 50s and early 60s, you will likely have a better idea of your retirement savings, and you might start making specific plans for your future.

The study done by Vanguard reported that 85% of eligible workers in this age group are participating in their plans. If you’re still working at a company that offers 401(k) matching, this is a great chance to increase your savings.

Retirement savings ages 65+

  • Average: $279,997
  • Median: $87,725

According to the Vanguard study, only 77% of eligible workers aged 65 and up participated in a 401(k) plan in 2021.

You can also start taking Social Security benefits at age 62, but your benefits will be higher if you wait until your full retirement age. For example, if you were born after 1960, your full retirement age for Social Security benefits would be 67.

How to save for retirement

You have a few options when it comes to retirement savings. 401(k), traditional IRA and Roth IRA plans will all allow you to contribute money and grow your retirement savings — but there are some key differences. 

Roth IRA

While you don’t receive a tax deduction when you contribute to a Roth IRA, you can make tax-free withdrawals during your retirement if you satisfy certain requirements since the money that goes into a Roth IRA is post-tax.

There are typically no required minimum distributions for Roth IRA account owners. RMDs require you to start taking minimum withdrawals by a certain age.

Traditional IRA

Contributions to a traditional IRA are eligible for tax deductions for both federal and state taxes. Since the money put into a traditional IRA is pretax, withdrawals you make during retirement are subject to income tax.

Account owners will also have to pay penalty fees on any withdrawals made before age 59 ½ and are subject to RMDs starting at 72.


Traditional 401(k) funding comes from pretax contributions by the account owner and employer — if they offer matching contributions. Withdrawals are subject to income tax during retirement. Some employers may offer a Roth 401(k) plan, so these withdrawals are tax-free since the money contributed was after taxes.

How to meet your retirement goals

Not everyone can invest in a 401(k) early in life. As soon as it becomes available, it’s worthwhile to consider.

Improve your 401(k) balance

Improving your 401(k) balance depends on how much you can contribute. Researching the best 401(k) plan options can be a good way to start building compound interest, resulting in a higher balance.

Make compound interest work for you: Compound interest happens when the interest on your money accrues interest itself. The earlier you start saving, the longer your money will compound.

If you think you’re in a good place with your finances and paying off your living expenses and debts, maxing out your 401(k) contributions might be worth considering.

Whether you start small or contribute close to the limit, consistently contributing to your 401(k) and ensuring your plan meets your savings goals can help you improve your average 401(k) balance and save more for retirement.

Prioritize your savings

Here are five things you can do to increase the money you put toward your retirement.

1. Start as early as possible

Although saving as early as possible can be tough, it can help you increase your retirement funds and take advantage of compound interest.

2. Create a budget

Look at your retirement budget and current lifestyle. You might be able to adjust your spending habits or cut back on unnecessary spending. Tightening up your budget with a budget calculator can free up funds and allow you to save more.

3. Pay down high-interest debt

High-interest credit cards, personal loans and lingering student loan debt are financial obligations that can keep your hard-earned funds tied up and away from your 401(k) account. Consider paying these off as quickly as possible.

4. Boost your income

This may be easier said than done. But to increase your annual income, consider asking for a raise, acquiring a new skill set or finding alternative ways to generate passive income.

5. Reassess your retirement plans

Ask yourself if your retirement budget is realistic. Will you be spending money during your retirement like you are now?