This Is the Average 401(k) Balance for Ages 45 to 54

Welcome to Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average.
-- Garrison Keillor

We'd all like to be above average when it comes to financial things, so it's natural to wonder how other folks are doing. Here's a look at average 401(k) balances for people in different age groups:

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Source: How America Saves 2024, Vanguard.

Those average numbers should seem a bit on the low side, as you imagine them not supporting retirees for very long. But those median numbers -- where exactly half of all people are above the number and half are below -- are even more shocking!

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Let's say that you are above average. Let's say you have $300,000 in your retirement accounts, and you're hoping to retire soon. Do you have enough to retire with? The helpful but flawed 4% rule can offer some insight. It will have you withdraw 4% of your nest egg in your first year of retirement, adjusting for inflation in subsequent years. (There are other, potentially better, withdrawal strategies to consider, by the way.) So, with 4% of $300,000, you'd be withdrawing $12,000 in your first year of retirement.

Add your Social Security benefits and any other retirement income before drawing any conclusions. If you find your nest egg lacking, know that you can improve your financial position in various ways. You might delay retiring by a few years, for example, and/or delay claiming Social Security. (For most folks, the best strategy is to wait to claim until age 70.)

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