Here’s how much money Americans have in their 401(k)s at every income level—see how you compare

Those gains won’t cover most workers’ retirement costs yet: Americans say they need $1.46 million to “live comfortably” in retirement, says a recent Northwestern Mutual survey. That’ll be especially hard for people with lower incomes to achieve, since account balances vary widely based on how much account holders earn — and, therefore, can contribute.

Here’s a look at the median account balances in 2023 by income:

• Less than $15,000: $3,691
• $15,000-$29,999: $6,142
• $30,000-$49,999: $10,072
• $50,000-$74,999: $24,939
• $75,000-$99,999: $51,073
• $100,000-$149,999: $91,323
• $150,000 or more: $188,678

Vanguard’s account balance totals don’t include any non-workplace savings like brokerage accounts, individual stock and bond holdings, real estate investments, savings accounts or inheritances — so they don’t necessarily give a full view of Americans’ retirement savings.

Some of the lower balance totals have to do with age, too: People often make and save less money earlier in their careers.

“People tend to accelerate retirement contributions as they get older because they tend to earn more, but also because they’re getting closer to retirement age,” says Michelle Gessner, a certified financial planner in Houston. “But it’s a big mistake for young people to minimize the importance of retirement contributions at a young age because of the time value of compound interest.”

Compound interest is interest that’s continually earned on both the principal amount and any accumulated interest, leading to exponential growth over time. The longer you invest, the more your money theoretically grows.

Your retirement savings goal will likely depend on factors like lifestyle, income, debt and the age you want to retire, so you may want to consult a financial professional to hammer out a plan. A common benchmark uses your income and age, as recommended by Fidelity:  

• By age 30: Have 1x your annual salary saved
• By age 40: Have 3x your annual salary saved
• By age 50: Have 6x your annual salary saved
• By age  67: Have 10x your annual salary saved

Don’t take those numbers as gospel, says Andrew Herzog, a CFP in Plano, Texas. After all, most Americans struggle to meet these goals, especially earlier in life.

“These benchmarks are a great way to begin the conversation, but that’s it,” Herzog says. “Beyond that, there are too many other factors to consider for these benchmarks to really apply to someone in particular.”

Generally, aim to put at least 10% of each paycheck into retirement savings, Gessner says. Raise your contributions by one percentage point annually, she adds: “The 1% increase each year will hardly be noticeable, and it is easy to manage.”

If you can’t spare 10% of each paycheck, start by saving whatever you can, says Gessner. “Saving just $100 a month at a 7% annual return can grow to over $100,000 in 30 years,” she says. “Saving works best with time, so start early.”

She offers one more tip: If your company matches employee contributions to retirement funds, take advantage.

Employers often match up to 3% or 6% of each worker’s pay. Since retirement funds grow with compound interest, contributing enough to receive the full matching contribution — what some financial pros call “free money” — is key, says Gessner: “Never leave money on the table.”

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