This Is the Average 401(k) Balance for Ages 55 to 64

Tens of millions of Americans use a 401(k) as their primary way to save and invest for retirement. It's understandable why, too. It's passive and convenient, allows you to lower your taxable income, and often comes with an employer match.

There's no "right" amount as far as how much you should have in your 401(k) at a certain age, but since many important retirement decisions are made between 55 and 64, we'll take a look at the average 401(k) for people in that range.

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Based on Vanguard's How Americans Save 2024 report, the average 401(k) balance for someone aged 55 to 64 is $207,874. The median balance at that age range -- which is worth looking at, because low or high balances can skew averages -- is $87,571.

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Is a 401(k) the best way to save and invest for retirement?

There's a lot to like about 401(k)s, but there are some shortcomings to them, in my opinion. Investment options could be limited for someone who wants to be more hands-on. 401(k)s have strict early withdrawal rules and penalties, and some smaller plans could be costly.

Complementing a 401(k) with other retirement accounts, such as a traditional or Roth IRA, is a great way to tackle retirement savings. IRAs provide benefits that a 401(k) doesn't, so combining gives you the best of each offer.

IRAs have much lower contribution limits than 401(k)s, so they're probably not best for your primary retirement account. However, they can serve as a great supplemental retirement account.

IRAs work similarly to brokerage accounts. They allow early withdrawal for life events like buying a home and education expenses, and most people will only pay the fees of their particular investment choices.

Approaching retirement savings with a holistic view is one of the best ways to ensure you can have the most financially stress-free retirement possible.

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