Average 401K Balance by Every Age in 2023 | 401K Calculator Tutorial
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- Опубліковано 19 чер 2024
- How much money should you have in your 401K retirement investments at every age? Are you ahead or behind the curve? Download your free 401K calculator at the link below!
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⏰ Table of Contents ⏰
0:00 401K Balances by Age Groups
15:03 Average 401K balance in the 20s
25:02 Average 401K balance in the 30s
35:35 Average 401K balance in the 40s
43:15 Average 401K balance in the 50s
51:33 Average 401K balance in the 60s
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I am in shock with how little the average balance of 401k is for each age group. I am 41 years old and have $673,258 in my total balance of my 401K and ROTH IRA and HSA account. I have been mainly investing in the SP500 index fund with the lowest expense ratio.
I'm 43 and have 5% of what you have. You probably have a house -not me. You probably drive low mile vehicles -I drive a 307k mile truck with no heat/air conditioning and the engine rattling.
@@Martin-og9zg check your expenses, dine out every lunch? Buy coffee every day? Holiday gifts….. if you don’t spend many hundreds of dollars on those each month, you have probably done what you could
@@razrgu3838 No eating out. Aldi or Wal-Mart..... $20-25/week for food (water only fluid from faucet or water fountain from work), cut my own hair, food that doesn't dirty dishes (I own 2 bowls/plates and one set of cheap utinsels, only stainless mugs given to me by work).
I work on my own vehicle with what tools that former landlord/landlords friends didn't steel.
No subscriptions beyond basic needs (shelter, auto/renters insurance, cell) &
Trying to work OT but its hard on 140 lb body.
@@razrgu3838
No eating out, Aldi or Wal-Mart $20-25/wk on fruit/vegetables and tuna (only fluid is water from faucet or fountain at work).
I cut my own hair, work on my own vehicle with handful (literally) tools weren't stolen by previous landlord/landlords friends.
I never made more than $30k (pre-tax) with no benefits while working 70 hrs a week for a 'friend'...i quit when I heard someone who worked next at a nearby competitor for the same amount of time, doing less and making 2x+ more than me, plus with benefits (I was always told no for time off and I didn't work enough to be full time -claiming I had to work 90hrs/week, until he fired me when I told him 32 hrs is full time by federal law and competitors pay 2x him.
@@razrgu3838 $20-25/week on fruit/vegetables/canned tuna weekly from Wal-Mart, Aldi (25 miles one way). Only water from faucet or at works water fountains.
No eating
I have worked for the Gov for 21 years and we were not educated at all about TSP. It took me a couple of years to even find out about TSP and I did not know to to put in more than 5% in it. I won't be able to retire until atleast 65 because of the lack of information.
I have 230,000 into my 401k at age 52 , however I also change jobs during my working year
I think this is a great video, however can you also talk about expenses. If someone doesn't have a mortgage or vehicle payments, the amount needed drop significantly. Also, if they have a pension or some sort also changes the narrative. Lastly, location plays a large part as well. At 48, we're recently debt free and thankfully we were also able to continue to invest in the 401k and have liquid cash to cover at least 8 years worth of expenses in cash alone.
If you search for “Financial Independence calculator FIRE Psy Chat,” you’ll find several videos where I talk in depth about the expenses. You’re absolutely right about the location too. You can download my FIRE calculator on my website linked in the description. I hope this helps
Thank you for the spreadsheets, it helps put things in perspective and focus on the next steps.
Love that they work for you. I got more working currently so you’ll be notified when they become available
Great video. I'll have to watch it several times.
You EARNED my like and sub with this video and the downloadable resources. Will share with my (almost) 21 y.o. college twins and their 15 y.o. sibling this weekend to get them on the right foot.
Wish these resources were around when I was their age, but hell, even Roths didn't exist back then! Fortunately, I stumbled into some smart but safe moves, and I'm on-point to retire at my desired age.
*ETA: THANK YOU, sir!
Age 27: Currently just paid off my 30k student loans and have been contributing to my 401k for a little under 2 years sitting at 24k, by 30 I’m expecting to have 60k. I will say do your research on your 401k options, don’t buy bonds! Check the average rate of return and fees!
I’m 27 also I only have 5k in mine what percent do you do my job doesn’t match i just set mine to 11% now after watching this video
You are the best for enlightening us lost souls out there.
Oldest age bracket here, with multiple times more than my group. 40 years in STEM field, low to moderate income history, conservative investor. I’m at least 50k ahead by just paying off mortgage early by paying small $100-200 principal bumps. A little discipline goes a long way.
Some mutual funds historically outperform the S&P 500. Research to find which.
The goals are way off so it must be for a couple 60-69. Figuring to 30 years of retirement we are saying if we had no interest on the 401k it splits up to a yearly amount of $32k if they have 30k for SS for a couple you have $62k a year. The more common answer is a 4% number is $39K plus 30k for SS means you have $69k a year. I would say $500k would be the total you need. When you retire you spend less money. $50k sounds like a good amount with everything paid off. This will depend on where you live.
I'm 41 with a -$20,000.00+ net worth, zero savings and zero retirement living out of an old beat-up car. Is there still time left?
Is this really true that people only have that much money saved in their 401ks? Do they have other retirement plans and that's why it's so low? I invested in my 401k since I was young, but I feel like I didn't put in as much money into my 401k until only a few years ago. I have more than what is on this list for my age, but I feel like I'm still far far from where I need to be when I retire.
I think I should have at least $800k in my retirement account at 47, but I only have $62k. My saving grace is the pention from work, wich is worth around $500k plus since it's until I die. And my wife gets some of it when I do pass. I'll keep adding to my retirement account for at lest another 15 years indeed though. Thanks for the video
I'm in the same boat. I'll bring in over 3K a month with a pension, I'll live off the next job while I'll invest and save with the pension money. I'm almost 57. I'll shut down full time work at 68. Collect Social Security at 67,pension and a full time job. It'll work out. You have time.
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@@punisher6659 I only wish that I didn't spend so much money on crap in my 20s. I actually started investing like in 1998 ($100 per month), but I only did it for two months and stopped, then I spent the $100 plus I got into credit card debt very quickly. So I ended up spending way more than what I made. Compounding interest working on against me 🤦. Even later on in life, until recently, I kept going with this behavior, at 47 years old. I have finally stopped and I'm very serious about NO MORE CREDIT CARDS. all cash now. I'm saving and investing as I type this. Even after messing up more than half my life, I still have time to recover. That's how amazing compounding interest is. At least I have no car debt and I only have about $102k left in my mortgage. My networth is around $128k, with the equity in my home, savings and the TSP, so I'm not a total idoit 😅
I'm 43 with ~230K in 401K, but feel like I'm behind, HAHA. I have been contributing for years but just started this year to max out my 401K annual amount. Bust after watching your video, i may need to adjust and start maxing out a Roth IRA and HSA first, then get back to the 401K. Looking at doing that for 2024. Not fully clear why Roth IRA should be priority over maxing my 401K which helps me lower my taxable income now.
I find Roth IRA as my tax free income going into my 60s. Contributing to the Roth IRA also allows me to withdraw it at any time. I have a Roth IRA full tutorial video on my channel so I encourage you to check it out
Max out you Roths. The short and sweet is when it comes time to take distributions from traditional IRA’s later, it is taxed as income. The marginal tax brackets are the same whether you are 43 or 73. (Who would have thought that you have to watch how much you “make,” even though you are no longer working!). On the other hand, Roth IRA distributions are not taxed.
There is some personalization when it comes to how much you earn and where you can get your taxable income to with pre tax investing. I personally would have to cut my household income in almost half to drop to a cheaper tax rate bucket which isn't very doable but if you get to some of the higher pay buckets it makes sense to look at it closer. Generally when you are younger and paid less it makes more sense to push for Roth as well and as you start making more money looking to the traditional pre tax options. There isn't a one size fits all solution to the traditional vs roth investing.
60 with 50 year old working spouse - household income around 285 (160 + 125) - debt free - rounding to about 500 in current savings - typically diversified but conservative at the moment / money market funds and CDs and plan to return to equities at the end of 2025, we'll see how things play out - projecting about a 100 forward increase per year on the 500, 'not including investments and interest, up or down' - goal is 1.5 in 2032 debt free - each will claim SSN at age 70 perspectively, assuming no noted health issues leading up to (not worrying about money left on table in event of early demise, as we're dead at that point lol ... and we left max to surviver) - the plan is 5-6k a month plus SSN (4k+2.5k) (about 12k minus Medicare and Taxes) to age 100 (the math works)
Thats why i started a brokerage account cause i wasn't sure if i would have socal security when i retire
I need to start working on a roth I'm getting access to another 401k in January so yea
I’m curious. How many in their 60s and 70s expect to sell their house to downsize and use the profit to retire?
Ahead
If one is behind on 401k contributions, would after tax contributions max sense to catchup?
I did the after tax contribution only because I was behind on my 401K after I paid off my debt. Luckily my employer offered this at the time so if yours is then I don’t see why not take advantage of it
You site free financial calculator link, but you need to give information to get the link...?
20 year olds making 50k, 37.5k already saved, no inflation? I like your videos but come on, this is far-fetched.
What 20 year old has $35,000 saved? They are usually that in debt if they went to college if not more.
None do, unless they have loaded parents or have won't the lottery. This goes to show how screwed the average American is by our system, right out the gate.
You’d be surprised how good my 20-year old clients save their money. They were taught at a young age to spend less than they make. I wouldn’t categorize all 20 year olds as broke or in debt. Not every gen z goes to college now and that’s why college has fewer enrollments.
@@FIREPsyChat Where are you getting your stats? There are outliers for sure, but that’s no where near the norm.
@djslots3088 the norm is exactly what I’m trying to get people out of. Why are people stuck in the norm? Where I got the stats were stated at the beginning of every chapter of this video. I never stated that every 20 year old has $35,000 saved. I stated that there’s the average 401K balance and there’s the median 401K balance. So, what do you think 20 year olds should do to get out of the so called norm?
@@FIREPsyChat honestly to hit retirement goals 20 yr Olds need to either work 80 hours a week, or go to a trade school to be an electrician maybe a plumber welder. College is ridiculously expensive, and doesn't always pay off unless you're in the right field. and then it takes a lot of luck just to get the first real job. Getting certificates for IT is a better plan than just going to school for it and programs are so outdated most of the time, in my opinion anyway as an IT grad.
Living at home is essential to save money, when possible. The cheapest car that's affordable yet not going to break down immediately is important because we have a car tax in America. Avoiding as much debt as possible is really important. So basically no credit cards for anyone who's not able to handle it which is most people
But even then it's really hard to get to 35k in the 401K by 29. I suspect that the average is being affected by outliers who had a good job since 22, and or come from the wealthier backgrounds.
I like the video by the way I think it's extremely important information. I'm not hating at all.
If I had my mortgage paid off, I could live on $15k as long as I have health insurance
I know this is a conservative take and assuming people are getting 2% raises every year. But that’s not keeping up with inflation. People are taking pay cuts every year due to inflation. Hell one year of inflation we had 8% that wiped out 4 years of raises instantly.
I'm late 30s and my wife early 40s. We both have a pension program through our jobs and on top of that I am saving about what is suggested while our total net worth in retirement is well ahead of the suggested. I have some uncertainty though that I want to work my own job until actual retirement though which is why I am putting the petal down for a bit here until I figure out how and where I want to pivot to from my current job.
You’ll retire when you’re ready. Until then, keep building it
Why would people want to max out their HSA when you can only use it for qualified medical expenses? Wouldn't it be better to that money into the roth IRA first, or max out your 401k?
I prioritize HSA because I can use it to reimburse myself later on for non-medical expenses. For instance, I just spent $250 on my contact lenses. Instead of using my HSA, I just saved the $250 receipt so that I can use that receipt to reimburse myself many years down the road. There’s no deadline on the reimbursement as long as I paid for those medical expenses under HDHP. You can check out my HSA tutorial video about the early withdrawal strategy:
ua-cam.com/video/Ceha9Hn91wQ/v-deo.html
@@FIREPsyChat oh wow I didn't know that. That's interesting. I'll have to check that out. Thank you for the response.
I’m 23 with 35754.27 in my 401k
I disagree with OP’s assessment regarding GenZ, the question was how much THEY will need to retire. If Gen-Z think they’ll need less than 3-4 million by the time THEY turn 65, they are delusional. 25-30 years back, 1 million was plenty enough to live on returns, but today you need at least twice as much.
7 % mortgage is average and people got used to paying 2% is a joke. That’s why you paid to much for a home and can’t afford it now. Stop buying crap and save more money.
ROTH 401k is the only way to save today
I have some aggressive opinions against retirement plans in general (pensions, 401(k), TSP, etc).
In short, I believe they're scams and some of the worst financial advice... You cannot save yourself to retirement. I don't think saving in these sort of vehicles is a sound retirement plan...
So what is a sound retirement plan?
Totally agree. I have a 401k because all my employers matched my contributions-couldn’t leave money on the table like that. Cash flowing real estate is the way to go!
Im 48. Total net worth about 700k and I feel soo behind. I regret not doing more in my 20s and 30s. The prospect of being older and broke terrifies me. Trying as hard as I can to make up for lost time. Last thing I want is to HAVE to be a people greeter at Wally World. 😂
You’re 48 years YOUNG. Just imagine what that $700K becomes in 7-10 years
That's nothing, try 41 with -$20,000 net worth and living in car. You have a cake walk.
Is the $89k the average saved among the entire population or retirement age pop?
Lmao @ 1.2M retirement for under 20 is a joke, right? How do you know life will be cheaper?
I am 35 years old now I achieve fire movement 2023. I have 15 millions is that enough for me to retire.
😢sadly not
I’m ahead but not by much.
The spreadsheet is not practical... nobody can keep increasing the contribution rate by 2% every year. Besides there is an annual contribution limit on 401k, I'm surprised the author cannot see this as a financial coach.
If you really paid attention to the spreadsheet, not one number exceeded the 401k annual contribution limit for 2023. The contribution limit will also increase to adjust for inflation in the future years. It's income x contribution rate = personal contribution at 23:00. If you still don't get it then I don't know what else to tell you
So I’m curious if I’m on the right track. I’m 45 years old with 265k in 401ks with 50k of that in annuities.
Im putting away 13% of my 130k a year salary not including the 6% employer match.
I also have a pension currently worth 93k.
Run your projections to see what it would be like if you maxed out the contribution. If you’re not ready for that, see where 13% takes you in the next 15 years
Nobody can live on $40K a year.
It all depends on their expenses and also where you live.
I make that at my current job. It's no small feat, even with the property paid off. The utilities, taxes and food eat up a ton, yet i am still investing 50% of each paycheck right into my roth401k. That is also because i am playing catch up as i am 32 and did not hace access to one before
$40k after taxes is basically what the average dual income household brings in. People do it all the time.
Since Gen z will seemingly never be able to afford houses they will need $4mill in retirement
I think I will be on the kowac$$ plan. Keep On Working After Collecting $ocial $ecurity. Should be a nice raise.