Unfortunately, women often face an uphill battle in investing enough for a secure future -- especially since they tend to live longer than men and need larger balances as a result.
Average 401(k) balance at retirement
Many U.S. workers retire by the time they reach 65. Vanguard's data shows the average 401(k) balance for workers 65 and older to be $272,588, while the median balance is $88,488.
For retirees following the 4% rule, the average balance would produce just $10,904 in annual retirement income, while the median would provide only around $3,540. Even when combined with Social Security, this may not be sufficient to provide a comfortable income in retirement.
Aim to invest as much as possible in your 401(k) and other retirement accounts
A 401(k) can be a convenient and simple way to save for retirement, although you have other options, including traditional IRAs and Roth IRAs.
You should be investing in these retirement plans throughout your career with the goal of amassing a nest egg large enough to meet your needs. If you aren't hitting your investment targets, consider carefully reviewing your budget to find more opportunities to save. As you earn salary increases, you may also want to save those raises in your 401(k) rather than spending the extra income since this can make it easier to hit your savings targets.
By automating contributions to a 401(k) and aiming to save 15% or more of your income for retirement throughout your career, you could end up with a 401(k) balance well above the average or median for workers in the U.S. Hopefully, you'll have a more secure retirement for doing so.
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