What Is the Average 401(k) Balance by Age?

Andrew Weber is a senior director of Planning Philosophy, Research and Guidance at Northwestern Mutual.

Retirement is a big milestone, but getting there doesn’t happen overnight. Financially preparing yourself to leave the workforce requires some forward thinking—particularly about your money. If you’re wondering whether you’re saving enough, you’re not alone.

Here, you’ll get an idea of how much you’ll want to have in your 401(k) at different ages and how much you should be contributing to your 401(k).

How much should I have in my 401(k)?

Without knowing you and understanding your situation, it’s tough to give a benchmark. The truth is that your retirement savings plan hinges on your individual goals and financial situation.  When determining how much you’ll want to save, here are a few questions you’ll want to answer that will help determine how much you’ll need:

• How long do you plan to work? Will you stop work completely or continue with part-time work for a while? Will you leave the workforce prior to 65 and need to pay for health insurance?
• Do you plan to relocate somewhere warmer? Downsize?
• What will make retirement fulfilling? Travel? Time with your grandkids? Classes?

Answering questions like these can be a good start to help you figure out how much you’ll need to budget in retirement. One rule of thumb is that you’ll need about 80 to 85 percent of your pre-retirement income to cover your retirement lifestyle. At Northwestern Mutual, we realize that everyone’s situation is unique—so our advisors ask deep questions to get to know you and how you imagine living in retirement. Then they make recommendations based on your goals.

Making 401(k) contributions

A 401(k) is an employer-sponsored account that’s specifically built to help you save for retirement. The contributions you make during your working years are typically made via automatic payroll deductions. That money may then grow over time—and if your employer offers any sort of match, all the better.

If you’re able, try to put 20 percent of your paycheck toward retirement. Anywhere from 5 to 15 percent might go into your 401(k) each month. However, this isn’t always possible, so any money you’re able to put in is going to help you in the long run. Even if you start with 3 to 5 percent and slowly increase as you’re able, saving something is better than saving nothing. (We do recommend putting in enough to get your full company match.)

The IRS does put limits on how much you’re able to contribute, however. In 2025, the individual contribution limit for a 401(k) is $23,500 (or $31,000 if you’re 50 or older). There are also limits to how much your employer is able to contribute. Overcontributing to your 401(k) can come with tax penalties, so if you earn a high income, it’s important to do a little planning ahead of time to make sure you’re not exceeding the limits.

401(k) withdrawals

When it comes to using your 401(k) in retirement, you’ll typically have to wait until age 59½ to make withdrawals in order to avoid a 10 percent penalty. Of course, you certainly don’t have to begin taking 401(k) distributions at this age. Letting that money continue to grow can help you shore up your nest egg and avoid additional taxes. However, you will need to begin taking required minimum distributions (RMDs) starting at age 73.

In retirement, you’ll be taxed on 401(k) distributions as if they were ordinary income. Therefore, it’s important to remember that a portion of what you’ve saved will go to Uncle Sam. Being strategic about how much you withdraw each year can help prevent you from paying more income taxes than necessary. 

Average 401(k) balances by age

Your 401(k) savings target should be tailored to your unique financial situation and goals. With that said, it can be helpful to compare your 401(k) balance to the average retirement savings as a quick reality check. Then you can talk through your actual situation with a financial advisor, who can get to know you and your goals.

According to the most recent data from the Federal Reserve, here are the average retirement balances by age. These numbers include 401(k) accounts and other types of retirement savings.

• Under age 35: around $30,000
• 35–44: around $132,000
• 45–54: around $255,000
• 55–64: around $408,000
• 65–74: around $426,000

How much should I have in my 401(k) by age 30?

While you may not be able to afford to make the maximum 401(k) contribution early in your career, the more you contribute at a young age, the more time your money has to grow.

By the time you reach age 30, you should aim to have a solid start on your retirement savings. That way, time is on your side. You can save smaller amounts each month to reach your retirement goal, compared to starting later and needing to save larger amounts to catch up. Starting in your 20s puts the impressive power of compounding interest in your favor. Your earnings will have many years to earn interest. If instead you wait to start putting money away for retirement, you’ll lose out on the extra potential growth from the interest.

How much should I have in my 401(k) by age 40?

Into your 40s, you’ve likely gotten more established personally and professionally and, hopefully, have put together a financial plan and monthly budget. If you haven’t yet, now is a good time to increase the amount you’re putting into your 401(k) each month.

Another financial cornerstone you may want to consider in your 40s (if you haven’t already) is life insurance—especially if you’ve got kids. You may have purchased a term policy when you were younger, but you can look into a permanent policy  for a lifelong death benefit and the added benefit of cash value, which could be another source of income in retirement.¹

How much should I have in my 401(k) by age 50?

Once you turn 50, you’re eligible to begin contributing an additional $7,500 in catch-up contributions to your 401(k). So, if you’re feeling behind, now’s a great time to start getting caught up.

Your 50s may feel like an expensive decade, as you could have other financial milestones hitting right about now, like paying for college or buying another property. But it’s important that you keep saving for retirement as a high priority. Your kids can take out loans for college; you’ll need your savings in retirement. The good news: If you put a solid financial plan in place, you’ll be prepared once these milestones hit, and you shouldn’t have to make any major changes to your savings plan.

How much should I have in my 401(k) by age 60? 

At age 60, you’re likely nearing retirement, so you’ll want to have the bulk of your retirement nest egg saved up.

One factor to consider here is how long you plan to be out of the workforce. If you plan to retire early, you’ll have to factor in additional health care costs, as you won’t be eligible for Medicare until age 65. Meanwhile, the minimum age to begin collecting Social Security is 62, but the longer you can wait, the higher your monthly payment will be—for the rest of your life. Factoring in the lifestyle you want to live in retirement will help you weigh your projected expenses with what you’ll need saved.

If you have a working spouse, it’s important to think about their timeline, too. Retiring at a different time than your spouse can present some challenges. That’s true when it comes to your relationship itself, not to mention your new realities about income and spending.

Average 401(k) contribution rate

According to data from the Plan Sponsor Council of America, the average 401(k) contribution in 2023 was 7.8 percent of the employee’s salary. Chances are, however, saving this much in a 401(k) isn’t going to get you to where you need to be to retire.

• You’ll want to work toward contributing 10 to 15 percent if you can.
• You’ll also want to consider your employer match—if you’re lucky enough to have one. Aim to contribute the maximum percentage your employer will match to make the most of this benefit. (And even more if you can!)
• Think about using other types of retirement accounts, too. These might be offered by your employer, or you might get into them on your own.

How to boost your 401(k) retirement savings

A traditional 401(k) is not the only way to save for retirement. A well-rounded and thorough retirement plan can include different types of accounts. These accounts are taxed differently, giving you a potential advantage over having just one financial tool. Our advisors often recommend preparing for retirement with a mix of financial tools with different tax treatments.

For example, if your employer offers a Roth 401(k), you may be able to make after-tax contributions to help with savings. Not only will the money grow tax-free, but you also generally won’t have to pay taxes on it when you withdraw it in retirement. It can be an advantage over a 401(k) because those distributions are taxed. And remember that you can leverage other retirement savings vehicles outside of what your workplace offers, such as a traditional or Roth IRA, to bolster your nest egg.

To get the most out of your savings, you’ll also want to pay attention to the types of investments you hold (known as your asset allocation) and your risk tolerance. Early on, you can afford to carry a bit more risk because you won’t need your savings for a while. As you approach retirement, you’ll likely want to be a bit more conservative with your investments to make sure the money is there when you need it. If you’re unsure what risk tolerance you should be carrying, your Northwestern Mutual financial advisor can help.

How much to save for retirement

Determining how much you’ll save for retirement each month will largely depend on your income, your expenses, other savings goals and what kind of lifestyle you want to live in retirement. The most important thing you can do is develop a retirement savings plan early and stick to that plan.

You’ll also want to regularly check in on your plan, because things change. You may land a new job that allows you to contribute more, get an unexpected bonus that can help you catch up on savings or have to scale back briefly to adjust for an unplanned family expense.

Staying in touch with a financial advisor can help you make sure you’re prepared for retirement. Your Northwestern Mutual financial advisor can help you determine how much you’ll need for retirement and help develop a plan that balances all of your savings goals.

^1. The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.

This publication is not intended as legal or tax advice. Consult with a tax professional for tax advice that is specific to your situation. All investments carry some level of risk, including the potential loss of all money invested.

Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP^®, CERTIFIED FINANCIAL PLANNER^®, and CFP^® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.