How Much You Should Have In 401k By Age

November 13, 2020

Dreamstime

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When it comes to your 401k, it’s never too late to start saving—but how much should you save? Fidelity Investments has created an average 401k balance by age.  This guide was created to decide whether you’re on target or need to increase the percentage of your contribution from your income to catch up.  In your 20s, 7% of your compensation should go to your retirement meaning you should have an average of $11,800 saved with the same amount as your salary by age 30.  In your 30s, your contribution rate should increase to 7.7% creating an average balance of $42,400 and three times your balance by 40. In your 40s, your contribution ticks up to 8.5% with an average balance of $102,700 with six times your salary by 50. In your 50s 10% of your salary should go into your account, with an average balance of $174,000 and eight times your salary by 60. In your 60s is when you will most likely begin withdrawing and your average balance of $195,500 starts to drop. IF you are still working, you should have 11.2% of your salary go into your 401k account.  How much should you ultimately save? Ten times your income is a common rule of thumb recommended by Fidelity, but you might require more or less depending on your specific circumstances.

SOURCE: Two Cents

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