Vanguard & Fidelity Data, Updated 2026
Average Retirement Savings by AgeAre You On Track?
The average American has $134,100 in their 401(k). But the median balance is only $35,300 — meaning half of Americans have less than that saved for retirement. The gap between where people are and where they should be is staggering.
Sources: Vanguard “How America Saves” 2025, Fidelity Investments Q4 2024 Retirement Analysis, Federal Reserve SCF
401(k) & IRA Balances by Age Group
Average and median balances for the two most common retirement accounts. The gap between average and median reveals how much high-balance accounts skew the numbers.
| Age Group | Avg 401(k) | Median 401(k) |
|---|---|---|
| Under 25 | $7,100 | $2,800 |
| 25–34 | $37,200 | $14,500 |
| 35–44 | $97,800 | $36,100 |
| 45–54 | $179,200 | $61,500 |
| 55–64 | $256,200 | $89,700 |
| 65+ | $272,500 | $88,900 |
Median 401(k) (All Ages)
$35,300
Half of Americans have less than this
Peak Avg 401(k) (65+)
$272,500
Lifetime savers at their highest
Median vs. Recommended (55-64)
-78%
How far behind the typical pre-retiree is
Average vs. Median 401(k) Balance
The top bar shows the average (skewed by mega-savers). The bottom bar shows the median (what the typical person actually has). The gap is the story of retirement inequality.
Are You On Track? Fidelity's Savings Benchmarks
Fidelity recommends saving a multiple of your annual salary at each milestone age. These benchmarks assume you start saving 15% of income at age 25, retire at 67, and want to maintain your lifestyle in retirement.
| Age | Target | Example |
|---|---|---|
| By 30 | 1x salary | Earn $60K → save $60K |
| By 35 | 2x salary | Earn $70K → save $140K |
| By 40 | 3x salary | Earn $80K → save $240K |
| By 45 | 4x salary | Earn $85K → save $340K |
| By 50 | 6x salary | Earn $90K → save $540K |
| By 55 | 7x salary | Earn $90K → save $630K |
| By 60 | 8x salary | Earn $90K → save $720K |
| By 67 | 10x salary | Earn $90K → save $900K |
Reality check: The median 401(k) balance for ages 55-64 is $89,700. For someone earning the median salary of $58,000, Fidelity says they should have 7x — or $406,000. The typical American nearing retirement has saved 22% of what experts recommend.
Recommended vs. Actual Savings
The amber bar shows where Fidelity says you should be (assuming median salary at each age). The gray bar shows where the median American actually is. The gap is the retirement crisis in one chart.
The Retirement Savings Gap
Here is the uncomfortable math. The median American aged 55-64 has $89,700 in their 401(k) and $55,200 in an IRA. Combined: about $145,000 in dedicated retirement savings.
Using the 4% safe withdrawal rule, that $145,000 generates $5,800 per year — or $483 per month. Add the average Social Security benefit of $1,907/month, and you get $2,390 per month in total retirement income. That is $28,680 per year.
The median household spends about $52,000 per year in retirement. The gap is $23,320 per year — money that has to come from somewhere: working longer, spending less, relying on family, or drawing down home equity.
This is not a future crisis. It is a current one. 40% of Americans aged 55+ have zero dedicated retirement savings. For the majority who do save, the amounts fall far short of what a dignified retirement requires.
Catch-Up Strategies by Decade
No matter where you are in the journey, there are specific moves you can make right now. The earlier you act, the easier the math — but it is never too late.
Build the Habit
Your biggest asset is time. Even $200/month at 22 becomes $500K+ by 65 at 8% average returns. Start with your employer match — it is free money. Automate contributions so you never see the money. At this age, every dollar invested does 30+ years of compounding work.
Accelerate Aggressively
Your income is growing but so are expenses (housing, kids). This is the danger zone for lifestyle creep. Every raise should increase your savings rate before your spending. Target 15-20% of gross income toward retirement. If you started late, you can still catch up — $500/month starting at 30 becomes $850K+ by 65.
Close the Gap
Peak earning years are here. If you are behind, this is your best window to close the gap because income is high and kids may be approaching independence. Redirect freed-up cash flow directly to retirement accounts. Consider a backdoor Roth IRA if your income exceeds direct contribution limits.
Maximum Catch-Up Mode
At 50 you unlock catch-up contributions: an extra $7,500/year in your 401(k) (total $31,000) and an extra $1,000 in your IRA (total $8,000). Use every dollar. This decade is also when many people receive inheritances, bonuses, or sell property — direct windfalls straight to retirement accounts before you adapt to the money.
Optimize the Transition
Shift from accumulation to preservation and distribution planning. Consider your Social Security claiming strategy (delaying to 70 increases benefits by 76% vs. claiming at 62). Review asset allocation — you likely need less risk but not zero growth. Healthcare costs are the wildcard: budget $315,000+ per couple for lifetime Medicare supplemental costs.
The power of starting early: $500/month invested from age 25 to 65 at 8% average returns = $1,745,504. The same $500/month from 35 to 65 = $745,180. That 10-year head start is worth $1,000,000. Not a typo. One million dollars for starting one decade earlier.
Glen's Take
12 years analyzing balance sheets for a hedge fund
I spent over a decade as an activist investor, staring at financial statements for a living. I have analyzed the retirement preparedness of entire workforces at the companies I invested in. Here is what I have learned:
The system is designed to fail you. The shift from pensions to 401(k)s moved the entire burden of retirement planning from professional fund managers to individual workers who were never trained in finance. It is like asking every patient to perform their own surgery because you handed them a scalpel. The 401(k) was originally a tax loophole for executives — it was never designed to be America's primary retirement system.
But the tools to win are available. Low-cost index funds did not exist when the 401(k) launched in 1978. Today you can buy the entire stock market for 0.03% in fees. Target-date funds automate asset allocation. Roth accounts let your gains grow tax-free forever. The tools are better than ever — the problem is that most people do not use them.
The single biggest lever is your savings rate. Not your investment returns. Not your stock picks. Your savings rate. Someone saving 20% of a $70K salary in index funds will retire wealthier than someone saving 5% of a $150K salary in actively managed funds. The math is unambiguous. Save more. Pay less in fees. Start now.
If you are reading this page and feeling behind — good. Anxiety is the precursor to action. The worst position is not being behind; it is being behind and not knowing it. You now know. The question is what you do next.
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Frequently Asked Questions
How much should I have saved for retirement by age 30?
Fidelity recommends having 1x your annual salary saved by age 30. If you earn $60,000, you should have $60,000 in retirement accounts. The median 401(k) balance for Americans aged 25-34 is only about $14,500 — meaning most people are well behind this benchmark. If you are at or above 1x salary by 30, you are in excellent shape. If not, increasing your savings rate by even 2-3% of income can close the gap over time.
Why is the average 401(k) balance so much higher than the median?
The average is inflated by a small number of accounts with very large balances — longtime savers, high earners, and people who received rollovers from previous employers. The median (50th percentile) tells you what the typical person actually has. For example, the average 401(k) for ages 55-64 is $256,200 but the median is only $89,700. Nearly three times the difference. Always use the median to compare yourself to reality.
How much do I need to retire comfortably?
The most widely cited rule is the 25x rule: save 25 times your annual expenses. If you spend $60,000 per year, you need $1.5 million (based on the 4% safe withdrawal rate from the Trinity Study). However, this varies based on your expected Social Security benefits, pension income, healthcare costs, retirement age, and desired lifestyle. A more conservative target is 30x expenses if you plan to retire before 60.
What is the 401(k) contribution limit for 2026?
The 2026 401(k) employee contribution limit is $23,500. If you are 50 or older, you can contribute an additional $7,500 in catch-up contributions, bringing your total to $31,000. The total combined employer + employee limit is $70,000 ($77,500 with catch-up). IRA contribution limits are $7,000 ($8,000 if 50+). Maxing out both a 401(k) and IRA means sheltering $30,500 per year from taxes ($39,000 with catch-up).
Should I contribute to a Roth 401(k) or traditional 401(k)?
If you expect your tax rate to be higher in retirement than it is now (common for younger workers early in their careers), choose Roth — you pay taxes now at a lower rate and withdraw tax-free later. If you are in your peak earning years and expect lower income in retirement, traditional is often better — you get the tax deduction now when it saves you the most. Many advisors recommend a mix of both for tax diversification. When in doubt, Roth is generally better for people under 40.
Is Social Security enough to retire on?
The average Social Security benefit in 2026 is approximately $1,907 per month ($22,884 per year). The maximum benefit at full retirement age is about $3,822 per month ($45,864 per year). For most Americans, Social Security replaces only 30-40% of pre-retirement income. Financial planners generally recommend replacing 70-80% of your pre-retirement income to maintain your lifestyle. The gap between Social Security and that target must come from savings, pensions, or continued work.
What if I started saving late — is it too late?
It is never too late, but the math gets harder. Someone who starts saving $500/month at 25 will have about $1.05 million by 65 (at 8% returns). Starting the same $500/month at 45 yields only about $274,000. To match the early saver, the late starter would need to save roughly $1,900/month. The options for late starters: aggressively increase savings rate, work a few extra years, reduce retirement spending expectations, or combine all three. Catch-up contributions after 50 help, but they cannot fully replace decades of compound growth.
How do retirement savings compare to what people actually need?
The gap is enormous. The median 401(k) balance for Americans aged 55-64 is about $89,700. Financial planners recommend having 7-8x salary saved by that age — for someone earning the median salary of $58,000, that means $406,000-$464,000. The typical American nearing retirement has saved less than 25% of what experts recommend. This is why 40% of Americans fear they will never be able to retire, and why the average retirement age keeps creeping upward.
Recommended Resources
Tools & books I actually use and recommend
Interactive Brokers
Low commissions, global market access, and professional-grade tools. This is where I hold my positions.
Open an AccountA Random Walk Down Wall Street
Burton Malkiel's classic case for index investing. The book that convinced millions to stop stock-picking.
View on AmazonThe Intelligent Investor
Ben Graham's timeless guide to value investing. The book Warren Buffett calls "the best investing book ever written."
View on AmazonSome links above are affiliate links. I only recommend products I personally use. See my full disclosures.
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