Most experts recommend trying to replace somewhere between 70% and 90% of your pre-retirement income when you leave work. This money should come from Social Security and from your savings, and, if you have it, from an employer pension.
Your income affects the amount you need saved, since you'll probably want to maintain a similar lifestyle when you retire as you enjoyed while you were working. After all, if you were making six figures and suddenly had to live on $20,000, it would be a drastic change.
Your income can also affect the amount you have available to save. If you make a lot of money, you probably have more disposable income to invest for your future.
Since your income plays such an important role in your retirement planning, it can be helpful to see how your retirement nest egg lines up with other people who have the same pay as you. Here's the data you need to do that.
How does your retirement savings compare to others with similar earnings?
According to Vanguard's 2025 How America Saves report, here are the average and median account balances by income.
| Income | Average 401(k) Balance | Median 401(k) Balance |
|---|---|---|
| Under $15,000 | $25,716 | $4,055 |
| $15,000-$29,999 | $19,858 | $6,475 |
| $30,000-$49,999 | $27,278 | $10,928 |
| $50,000-$74,999 | $62,618 | $27,528 |
| $75,000-$99,999 | $109,770 | $53,112 |
| $100,000-$149,999 | $188,329 | $98,434 |
| $150,000+ | $377,488 | $221,220 |
Data source: Vanguard.
It's pretty clear that both average and median balances go up with higher incomes. Of course, average balances are higher than the median because some people with very large amounts invested in their retirement plans end up driving up the average.
Still, those with the highest incomes have over 50 times more saved for retirement compared to the lowest earners.
Obviously, these individuals with large salaries are going to need more money in their 401(k) accounts to maintain their lifestyle. But those on the lower end of the income scale have balances so low that they wouldn't come close to replacing the recommended income percentage.
For example, if you had just $10,928 saved and you followed the 4% rule, your investments would only produce around $437.12 per year in annual retirement income. That's well below the $30,000 to $49,999 that people with this level of median savings currently earn.
Now, this data does cover all ages, so people with a long time left until retirement could be skewing the numbers downward. But the fact is, if you have many years until retirement, you'll need to have an even larger nest egg saved because you have to account for the impact of inflation, which will reduce the future buying power of your savings.
Are you on track for a secure retirement?
Seeing how you stack up to your peers can be interesting and can give you insight into how people with similar earnings are managing (or not managing) to invest for retirement.
The most important thing, though, is to make sure you are personally prepared with enough money in your 401(k) or IRA to live the life you want after you stop working. You can do that by:
- Deciding on the total amount you must save. A good rule of thumb is to estimate that you'll need 10 times what you were making before retiring.
- Using online calculators like those at Investor.gov to see how much to save monthly to end up with the nest egg you've decided is necessary.
- Budget based on the amount you must save, making cuts to ensure that you can invest the desired amount (or at least taking steps to work up to that amount if you can't invest as much as you need right now).
- Automate contributions to your 401(k) or other retirement plans to ensure that you save the necessary sum.
It's important to remember that Social Security alone can't support you, so making this type of plan for a secure future is well worth the effort, regardless of whether you are ahead of or behind those in your same income bracket.
