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Average 401(k) Balance by Age

StillEdge

Member
Oct 29, 2017
144
I’m really low on my time line. Is there a sub reddit to understand 401ks and Roth. I never had anyone in my life to explain it to me and it was just like a year ago my boss yelled at me for not having one lmao.
 

studyguy

Member
Oct 26, 2017
7,002
Well above the median but below the average at my age, so fuck me.

Oh wait read through I'm basically at where it calculates it nevermind? Still feel like I should add more.
 

emag

Member
Oct 26, 2017
5,697
I’m really low on my time line. Is there a sub reddit to understand 401ks and Roth. I never had anyone in my life to explain it to me and it was just like a year ago my boss yelled at me for not having one lmao.
They're just tax advantaged retirement savings. A 401(k) is usually available through your employer. You can put in about $17K every year. An IRA you'd set up directly through a brokerage, with about $5500 max a year.

For either you can pay taxes now (on what you put in, Roth) or later (what you take out, traditional).
 

The Climaxan

Member
Oct 27, 2017
529
NC-USA
lolololol. Retirement. Hilarious concept for me, considering no man in my family has lived past the age of 65. I have a 401K, but i'm making a bigger investment in life insurance.
 

Yaboosh

Member
Oct 25, 2017
6,312
They're just tax advantaged retirement savings. A 401(k) is usually available through your employer. You can put in about $17K every year. An IRA you'd set up directly through a brokerage, with about $5500 max a year.

For either you can pay taxes now (on what you put in, Roth) or later (what you take out, traditional).
$6k now for IRAs.
 

Octodad

Member
Oct 26, 2017
1,658
I’m really low on my time line. Is there a sub reddit to understand 401ks and Roth. I never had anyone in my life to explain it to me and it was just like a year ago my boss yelled at me for not having one lmao.
I'm not a financial expert, but I understand this stuff pretty well. If you want to PM me I can give you a basic run down.

Basically it works like this though.

If you have a 401k or 403b (it's basically the same) at work you can contribute up to $19,000 ($19,500 in 2020) to it per year. This money is put in there before taxes, so no taxes get taken out. You can't touch it until you retire. When you do take it out at retirement, it will be taxed, but at the income you're making then (which is likely less).

A lot of employers match up to a certain amount. So if they match an amount, you should at least put that in. Not only are you not getting taxed, but you're getting instant doubling of your money from an employer.

A Roth IRA is an account you can put money in after taxes. You can put $6,000 a year into it. You put this money in after tax. But! When you retire, you don't have to pay taxes on it. So as it accrues, all of the money that it makes won't be taxed when you take it out.

So the basic idea is this:

401k - give at least what your employer matches because that's instant doubling of your money.

After that (if you can)

Roth IRA - $6,000

After that (if you can)

401k - Maximum ($19,000 of our own money in 2019)

After that (if you can)

Your own stock investments

The only disclaimer is if you make more than $194,000 (or $203,000 in 2020) as a household you can't use a Roth legally.
 

ArachosiA

Member
Nov 4, 2017
636
Well below average. Been working my entire life and still just able to save a little bit by being frugal. Oh well, I want to work until I die anyway. I get pretty depressed when I have too much freetime.
 
Apr 24, 2018
1,088
I basically spent my 20s with no match (companies that required one full year before matching) and terrible salaries - only have a pitiful 3k in a traditional IRA to show for that part of my life. However, at my current employer I now get a good match at 100% of first 4%. I'm planning on slowly increasing how much I contribute each year, starting this past year. Likely going to contribute 8% of my salary next year.

Currently in my early 30s, but with normal compounding expect to be right around the listed figure by age 39, assuming normal market returns and stagnant wage growth.

However, I do also have a decent Roth IRA balance and a health brokerage account with personal investments, with the latter being something I easily imagine is well above the average amount for someone my age.
 

Octodad

Member
Oct 26, 2017
1,658
I basically spent my 20s with no match (companies that required one full year before matching) and terrible salaries - only have a pitiful 3k in a traditional IRA to show for that part of my life. However, at my current employer I now get a good match at 100% of first 4%. I'm planning on slowly increasing how much I contribute each year, starting this past year. Likely going to contribute 8% of my salary next year.

Currently in my early 30s, but with normal compounding expect to be right around the listed figure by age 39, assuming normal market returns and stagnant wage growth.

However, I do also have a decent Roth IRA balance and a health brokerage account with personal investments, with the latter being something I easily imagine is well above the average amount for someone my age.
That's so good. Frankly, the match is great to get, but you can do great investing just yourself with no match.
 
Apr 24, 2018
1,088
That's so good. Frankly, the match is great to get, but you can do great investing just yourself with no match.
Yeah for sure - completely agree on being able to do great yourself with no match. I saved judiciously in my 20s, just in personal investments (I started investing at 18 due to the encouragement I got from my father, who was a fairly savvy self-taught investor; financial magazines were all over our house). Starting last year, I decided to buckle down on beefing up the 401(k) beyond "just" getting the match, and it's a trend I hope to continue.

I'm in an interesting situation now where I've been offered remote employment (which I've just started, I was actually ready to resign due to sudden unexpected overhead costs increasing). I'm not fond of working remotely, and it's sort of on a trial basis at the moment on both my side/boss's side (but if it's between remote and unemployment, obviously an easy decision to make). I may go back and stay with my parents temporarily and try to focus on getting into business school, if my current prospects don't pan out.
 

CrankyJay

Member
Oct 25, 2017
5,975
I just turned 40 and am apparently putting the 60 year olds to shame.

(This is combined 401k with IRA tho)
 

moonie

Member
Oct 25, 2019
136
That’s a lot lower than the numbers you usually read about. Which I guess is good because the common wisdom about what you should have at x age was completely unrealistic bullshit for the current economic reality young working people face in this country.
I hope it's not because all those people with low numbers are relying on social security. Cause if they are, we're all fucked.
 

WoahW

Member
Oct 27, 2017
1,367
Above the median with 2 years left for my age bracket means I’ll hit above average no issue
 

dem

Member
Nov 3, 2017
441
Those numbers seem low to me...
I have at least that average in my RRSP/TFSA... and a defined benefit pension.
 

Desi

Member
Oct 30, 2017
370
About to turn 31 and if that $42k is the starting at 30 then I am behind a little. Still my contributions are fairly high right now, so I shouldn't have any issue if I continue my pace.
 

reKon

Member
Oct 25, 2017
4,557
This is ridiculous. How is somebody supposed to afford a mortgage and a decent lifestyle while still putting 40k a year in an account they can't touch.
1) You can touch it by doing some planning, which involves a ROTH conversion ladder, but it would take 5 years to touch that money after doing the conversion (and you would have to pay tax on the amount converted

2) You or you & SO might not need $2 million. The amount you need in retirement is all dictated by your annual expenses. Maybe together you would just need $1.7M instead

3) It's not ridiculous to put that much away as long as your income is high enough and you haven't spent too much money on a home to begin with.

There are people who make $100K in household income between two people with kids but live on $35-$50K of expenses as a family from being frugal. Yes it can be fucking hard to hit that target, but it's doable assuming you didn't overspend on a home and car in the first place. Again, this example above assumes that you need $2 million for retirement. And this is without considering social security.

4) For Age of 40 $2900 x 12 = $34,800‬, not $40K

5) The entire point is it show how costly it is to not start early. It's very hard for people to do this because the literally don't have enough to put away, but if there's anything that you CAN put away, you should for this exact reason.
 

Euler007

Member
Jan 10, 2018
1,203
I reached that sixtysomething figure in my late twenties, from working lots of overtime and living like a monk,
 

Zhengi

Avenger
Oct 28, 2017
517
Twice the median for my age group, but not close to the average. I'm definitely no where at twice my annual salary. Only consolation is that I have a pension and everything in my Roths is extra.
 

BearPawB

Member
Oct 25, 2017
1,005
My company matches like 7% so despite starting a little later than a lot of people (30), It has been building at a decent pace. Im 33. and have more than half my annual salary saved.
 

Plumpman

Member
Jan 24, 2018
330
I'm maxing out my Vanguard Roth every year and currently just grabbing the 3% + match at my company.
I'll probably increase my IRA contribution a bit, but otherwise its going well!

EDIT: Also, wanted to supremely thank ResetEra and the earlier Roth / Savings thread. It got me started and I would be screwed otherwise. Thank you!
 

DanteMenethil

Member
Oct 25, 2017
2,597
Depends on if you think your expenses will be covered by your pension alone or if you will need more money. But it would of course be reasonable to have less in your 401k or IRA than what the average person needs.
Theres also a stock option plan where they match 50% of what you put in (you can contribute a max of 5% your pay toward buying stocks and they put in 50% of that amount too). I feel like with these 2 programs I should be ok, maybe I should start saving in a 401k anyway.
 

Octodad

Member
Oct 26, 2017
1,658
Theres also a stock option plan where they match 50% of what you put in (you can contribute a max of 5% your pay toward buying stocks and they put in 50% of that amount too). I feel like with these 2 programs I should be ok, maybe I should start saving in a 401k anyway.
It really just depends on a number of factors. If your income is high enough, putting money into a 401k is just tax efficient. My wife and I would get taxed around 28% on the money we put in our 401ks. At that point, it just seems worthwhile to do it.
 

Ziltoidia 9

Member
Oct 25, 2017
3,395
I'm way behind, which is to be expected since after 2008 I got f'd over.

Though, the median vs average difference makes me feel that the really privileged ones are rising the stats.
 

bionic77

Member
Oct 25, 2017
11,767
Jeeeezus.

The median 401k savings for people in their 50s is 60k?

My salary has increased a lot in the last 6 years (I am 42) so my 401k is not where it should be based on their numbers but I am well ahead of average and I am still sweating retirement.
 

nel e nel

Member
Oct 27, 2017
1,631
What the fuck ERA? Between this and the annual income thread, why are you trying to figure out our individual net worths?
 

Octodad

Member
Oct 26, 2017
1,658
If the only savings you have is 401k, you’re 401fucked.It should be this in combo with an IRA.
Not really. If my wife and I both max out our 401ks for our career, we'll have over 5 million not including matching. That's far from fucked.

You think $40,000 in contributions is fucked? But +$6,000/$12,000 will be amazing? That makes no sense.
 

thewienke

Member
Oct 25, 2017
2,716
Im 35 and got nothing. Should probably kill myself now.
You're not alone and discussing retirement on the internet is often an exercise in flexing one's wealth or misery. There are lot of assholes on the internet that will basically make it sound like you should just kill yourself if you didn't start your IRA at age 18 or 20 or whatever.

The medians in the OP tell the story about where we're actually at in society in saving for retirement. All these planners and such say you need to have millions of dollars saved up and that's just not going to be the case for 90% of society. I get that we're in a "fuck boomers" mindset politically right now but taking care of the elderly is going to be a major issue as fewer people retire with pensions or adequate retirement plans and more and more people retire with insufficient savings.
 

Octodad

Member
Oct 26, 2017
1,658
You and your spouse are in the minority as outlined in the OP.
You blatantly said if all you do is have a 401k you're fucked.

Then you said if you had a IRA you'd be good.

That's makes no sense regardless of if I'm in the minority.

If I just had a 401k and put $19,000 a year in it I would be doing amazing. Not "fucked."