This article may contain references to products or services from one or more of our advertisers or partners. We may receive compensation when you click on links to those products or services. Nonetheless, our opinions are our own.
The information presented in this article is accurate to the best of our knowledge at the time of publication. However, information is subject to change, and no guarantees are made about the continued accuracy or completeness of this content after its publication date.
- Average 401(k) Balance By Age And Tips To Maximize Retirement Savings In 2025
- Average 401(k) Balance By Age In 2025
- Retirement Planning Questions To Consider
- Tips To Maximize Your 401(k) In 2025
- Other Retirement Planning Considerations
- Frequently Asked Questions
- Final Thoughts On Average 401(k) Balances And Retirement Planning
- Recommended Reads
Average 401(k) Balance By Age And Tips To Maximize Retirement Savings In 2025
Preparing for retirement early ensures greater financial stability later in life. In 2025, the average 401(k) balance varies significantly by age, ranging from about $21,000 in your 20s to over $350,000 by your 60s, according to Fidelity Investments. Understanding these averages can help set realistic savings goals. This article explains how much you should save and provides practical strategies to boost your retirement funds effectively.
Average 401(k) Balance By Age In 2025
Based on Fidelity Investments data, here is how Americans’ 401(k) balances compare across different age groups in 2025:
In Your 20s
Average balance is approximately $21,000. The focus at this stage should be on starting small and maintaining consistency. Even saving $50 per paycheck makes a difference. If your employer offers matching contributions, make sure to take full advantage, as it is essentially free money.
In Your 30s
The average balance grows to around $71,000. Life expenses typically increase, so it’s important to raise your contribution rate whenever possible, such as after a raise or bonus. Experts recommend contributing at least 15% of your income, including employer matches.
In Your 40s
Average balances reach about $151,000. At this point, evaluate if your savings are on track to replace 70 to 80% of your income in retirement. If not, consider adjusting your investment mix and increasing contribution levels.
In Your 50s
The average balance rises to $232,000. This is the best time to utilize catch-up contributions. In 2025, workers aged 50 and older can contribute an extra $7,500 annually, offering a significant boost to savings before retirement.
In Your 60s
Average balances peak at approximately $359,000. Focus on building a withdrawal strategy by determining your monthly needs and planning when to start taking distributions. Balancing continued growth with preservation of assets is critical at this stage.
Note: These figures represent averages. Individual goals will vary depending on lifestyle, cost of living, and retirement plans.
Retirement Planning Questions To Consider
Contributions And Match
- Am I saving at least 15% of my income including employer match?
- Is my employer offering a match, and am I maximizing it?
- Can I increase my contribution rate this year?
Investment Strategy
- Is my investment mix suitable for my age and goals?
- Should I consider target date funds or rebalance my portfolio?
- Am I aware of fees that may reduce returns?
Monitoring And Adjustments
- How often do I review my 401(k) plan?
- Am I considering all retirement income sources such as pensions and IRAs?
- Would diversifying with a Roth IRA or Health Savings Account (HSA) benefit me?
Long-Term Planning
- When do I want to retire, and how much will I need monthly?
- How might inflation affect future expenses?
- What is my plan for managing rising healthcare costs?
Risk And Safety Net
- Do I have a separate emergency fund?
- Am I adjusting my risk level appropriately as I age?
- Am I protecting my retirement assets from unexpected expenses?
Smarter Financial Habits
- What steps can I take this year to improve my 401(k) strategy?
- How can I continue learning about investing and retirement planning?
Voted "Best Overall Budgeting App" by Forbes and WSJ
Monarch Money helps you budget, track spending, set goals, and plan your financial future—all in one app.
Get 50% OFF your first year with code MONARCHVIP
Tips To Maximize Your 401(k) In 2025
Automate Your Contributions
Set up automatic payroll deductions so saving happens consistently without requiring active effort.
Diversify Your Investments
Avoid putting all your savings into one fund type. Balance your portfolio with stocks, bonds, and target date funds based on your risk tolerance.
Max Out Employer Matching
If your employer offers a match (for example, 50% up to 6%), contribute enough to receive the full match since it is free money.
Review Your Plan Annually
Revisit your 401(k) plan every year or after major life events such as marriage, a job change, or purchasing a home.
Seek Financial Guidance
If uncertain about your strategy, consult a certified financial planner or use online retirement calculators to model future needs.
Other Retirement Planning Considerations
Timing your benefits is important. Delaying Social Security until age 70 increases monthly payments but should align with your overall retirement strategy.
Estate Planning
Maintain an up-to-date will and beneficiary designations on retirement accounts. Consider a living trust for larger estates to simplify asset transfer.
Healthcare Costs
Plan ahead for medical expenses by saving now. Using a Health Savings Account (HSA) can offer tax advantages if eligible.
Taxes In Retirement
Understand how withdrawals will be taxed. Roth accounts provide tax-free withdrawals, whereas traditional accounts are taxed upon distribution.
Lifestyle Planning
Consider what retirement will look like for you—downsizing, travel, part-time work, or volunteering—and save accordingly to support your vision.
Frequently Asked Questions
What is the average 401(k) balance by age in 2025?
According to Fidelity Investments, the average 401(k) balance ranges from about $21,000 in the 20s to approximately $359,000 in the 60s. These averages provide useful benchmarks for savers at different life stages.
How much should I save each year for retirement?
Experts recommend saving at least 15% of your income annually, including any employer match. This rate helps build a sufficient nest egg to maintain your lifestyle after retirement.
What can I do if I am behind on savings?
You can increase your contributions, minimize investment fees, and if you are 50 or older, use catch-up contributions to accelerate your savings. Adjusting your plan and seeking advice can also help improve outcomes.
Which is better: 401(k) or IRA?
Both have advantages. 401(k)s typically have higher contribution limits, while IRAs offer greater investment choices. Many people use both to maximize their retirement savings and flexibility.
Can I borrow from my 401(k)?
Some plans allow loans, but borrowing can slow the growth of your retirement funds. It should be used sparingly and only when necessary, considering potential repayment obligations and tax implications.
What factors affect my 401(k)’s performance?
Performance is influenced by your contribution rate, investment mix, market conditions, and fees. Regularly reviewing these factors can help optimize your retirement savings.
How often should I check my 401(k)?
It is advisable to review your 401(k) at least once a year or after significant life events such as marriage, job changes, or major purchases. This ensures your plan remains aligned with your goals.
Final Thoughts On Average 401(k) Balances And Retirement Planning
Knowing the average 401(k) balances by age offers helpful context for retirement planning, but personal financial journeys vary widely. Continuous learning, consistent contributions, and regular plan reviews are vital for success. The best time to start saving was yesterday; the next best time is today. Taking proactive steps now can provide peace of mind and financial security for your retirement years.
Reviewed and edited by Albert Fang.
See a typo or want to suggest an edit/revision to the content? Use the contact us form to provide feedback.
At FangWallet, we value editorial integrity and open collaboration in curating quality content for readers to enjoy. Much appreciated for the assist.
Did you like our article and find it insightful? We encourage sharing the article link with family and friends to benefit as well - better yet, sharing on social media. Thank you for the support! 🍉
Article Title: Average 401(k) Balance by Age and Tips to Maximize Retirement Savings in 2025
https://fangwallet.com/2025/08/09/average-401k-balance-by-age-and-tips-to-maximize-retirement-savings-in-2025/The FangWallet Promise
FangWallet is an editorially independent resource - founded on breaking down challenging financial concepts for anyone to understand since 2014. While we adhere to editorial integrity, note that this post may contain references to products from our partners.
The FangWallet promise is always to have your best interest in mind and be transparent and honest about the financial picture.
Become an Insider
Subscribe to get a free daily budget planner printable to help get your money on track!
Make passive money the right way. No spam.
Editorial Disclaimer: The editorial content on this page is not provided by any of the companies mentioned. The opinions expressed here are the author's alone.
The content of this website is for informational purposes only and does not represent investment advice, or an offer or solicitation to buy or sell any security, investment, or product. Investors are encouraged to do their own due diligence, and, if necessary, consult professional advising before making any investment decisions. Investing involves a high degree of risk, and financial losses may occur including the potential loss of principal.
Source Citation References:
+ Inspo
There are no additional citations or references to note for this article at this time.
