If you were born between 1965 and 1980, you're part of Generation X, or "Gen X," sandwiched between the baby boomers and the millennials. That means you're between 45 and 60 years old this year, and perhaps starting to count down the days or months until you retire.
But can you afford to retire? Are you on track with your savings and investing? Here's a look at the average 401(k) balance and average IRA balance by generation, according to Fidelity:
|
Generation |
Birth years |
Average 401(k) balance |
Average IRA balance |
|---|---|---|---|
|
Baby Boomers |
1946-1964 |
$249,300 |
$257,002 |
|
Gen X |
1965-1980 |
$192,300 |
$103,952 |
|
Millennials |
1981-1996 |
$67,300 |
$25,109 |
|
Gen Z |
1997-2012 |
$13,500 |
$6,672 |
Data source: Fidelity.com, amounts as of Dec. 31, 2024.
Don't pay too much attention to that table, though, because those totals are not necessarily how much you need to have amassed to retire. Consider that the boomers, aged between 61 and 79 this year, have an average of roughly $500,000 combined in their 401(k)s and IRAs. That can sure seem like a lot, but it's far too little for most of us -- unless we have a lot of other income coming in.
Image source: Getty Images.
The average monthly Social Security benefit was $2,005 as of June, or only about $24,000 for the year. If you use a withdrawal strategy such as the (imperfect) "4% rule" with a nest egg of $500,000, you'd be taking out $20,000 in your first year of retirement and adjusting subsequent withdrawals for inflation. Those two together would only deliver $44,000 for the year, or $3,667 per month.
Take some time to crunch some numbers and come up with a solid retirement plan for yourself. Figure out how much income you'll need in retirement and how you'll get it. Be sure to factor in healthcare costs, too, as they're likely to be substantial. If you're way behind in your savings, consider delaying retiring by a few years, as that can be a powerful move.
