Saving for retirement is challenging enough as it is, but it can be even more difficult depending on your income.
The median wage among U.S. workers is around $60,000 per year, according to 2024 data from the Bureau of Labor Statistics. A 2024 survey from Bank of America also revealed that nearly half of Americans say they live paycheck to paycheck -- which likely doesn't leave a lot left for retirement.
When it comes to saving, your goals will depend on your unique situation. That said, it can sometimes be helpful to see how others in similar circumstances are faring. Here's what the average 401(k) balance looks like among those earning incomes between $50,000 and $75,000 per year, plus one nearly effortless way to save more.
Image source: Getty Images.
How do your savings stack up to the average?
Income can play an enormous role in your retirement planning journey. The more you can afford to contribute each month, the more your savings will grow over time. As one might expect, there's a direct correlation between how much a worker is earning and the size of their nest egg.
In 2024, Vanguard released a study examining the account balances among 401(k) participants sorted by age, income level, gender, and job tenure.
Among those earning $50,000 to $74,999 per year, the average 401(k) balance is $59,273. The median sits significantly lower at $24,939. For context, the average and median balances across all income levels are $134,128 and $35,286, respectively.
| Annual Income | Average 401(k) Balance | Median 401(k) Balance |
|---|---|---|
| Under $15,000 | $24,175 | $3,691 |
| $15,000 to $29,999 | $18,610 | $6,142 |
| $30,000 to $49,999 | $25,096 | $10,072 |
| $50,000 to $74,999 | $59,273 | $24,939 |
| $75,000 to $99,999 | $106,875 | $51,073 |
| $100,000 to $149,999 | $178,818 | $91,323 |
| $150,000 and higher | $336,470 | $188,678 |
Data source: Vanguard. Table by author.
Regardless of how much you're earning, small contributions can go a long way. If you're looking to supercharge your 401(k) balance, taking advantage of the employer match could earn you hundreds of thousands of dollars more over time.
Squeeze every penny out of the company match
Not all 401(k) plans offer a company match, but if yours does, that's essentially free money from your employer. Contributing enough to earn the entire match could have a profound impact on your nest egg, even if you're only saving a small amount each month.
For example, say you're earning $60,000 per year, and your employer will match 100% of your contributions up to 3% of your salary. That's a maximum of $1,800 per year, in this case, or $150 per month.
Let's also look at two scenarios. In scenario one, you're saving $100 per month while earning a $100 monthly match. In a second scenario, say that you contribute $150 per month to earn the full $150 match each month. Let's also say you're earning a 10% average annual return in both cases. Here's approximately how your total savings would add up over time:
| Number of Years | Total Savings: Investing $100 per Month + $100 Monthly Match | Total Savings: Investing $150 per Month + $150 Monthly Match |
|---|---|---|
| 20 | $137,000 | $206,000 |
| 25 | $236,000 | $354,000 |
| 30 | $395,000 | $592,000 |
| 35 | $650,000 | $976,000 |
Data source: Author's calculations via investor.gov.
In this case, saving an extra $100 per month in total (with only half of that coming from you) could add up to around $326,000 in total savings after 35 years. Also, if you earn regular raises, your employer may contribute even more over time since the match is often a percentage of your salary.
Contributing to a 401(k) is one of the most powerful ways to save for retirement, and matching contributions can supercharge your finances. Regardless of your salary or how your balance compares to the average, taking small steps now will pay off by retirement age.
