Retirement can be incredibly expensive, and with Social Security struggling, many workers will need to rely primarily on savings to make ends meet.
The average worker expects to need around $1.8 million to retire comfortably, a 2024 survey from Charles Schwab found, yet most Americans are not on track to reach that goal. Here's what the average 401(k) balance looks like among those aged 55 to 64, plus one simple tip for significantly boosting your savings.
Where the average American stands on savings
Each year, Vanguard releases an updated version of its How America Saves report. The report details Americans' savings and retirement planning journeys, including average account balances among Vanguard 401(k) holders.
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In 2024, the average 401(k) balance among those 55 to 64 years old is $244,750. However, the median may be a more accurate representation of the typical worker's savings, as the average can be skewed by extremely high-earning individuals who have millions saved for retirement. The median represents the middle figure in the data set, where half of the values are higher and half are lower.
The median balance for this age group is just $87,571, the report revealed. While that's a worryingly low number, considering those aged 55 to 64 are closing in on retirement age, there's one trick that could supercharge your savings: take advantage of the 401(k) company match.
A company match can instantly double your savings with zero effort, and by taking full advantage of it, you could potentially save thousands more per year. Even $2,000 per year, at a modest 10% average annual rate of return, could add up to nearly $115,000 after 20 years.
Your retirement goal may differ from others, so it's wise to calculate your specific target rather than simply comparing your 401(k) balance to the average. But if you're falling behind, small steps like taking advantage of the company match can boost your savings more than you might think.
