What are Average Retirement Savings for Different Age Groups?

Many people wonder how their 401k and other retirement savings compare to others. Age is an important consideration in making such comparisons. The more time that a person has until reaching retirement (i.e. the younger), the greater the opportunity to make additional contributions and for investment earnings to build up his or her retirement account balance.

Unfortunately, the best retirement savings by age data available predates the 2008-09 financial meltdown. The following table shows average and median retirement account balances for 2001 and 2004 as reported in the Survey of Consumer Finances (SCF). ¹ Note that the figures are adjusted and shown in 2007 dollars to allow meaningful comparisons across years.

Average and Median Retirement Account Balances by Householder Age

Age of householder	2001 Average Value, all Accounts	2004 Average Value, all Accounts	2007 Average Value, all Accounts	2001 Median Value, all Accounts	2004 Median Value, all Accounts	2007 Median Value, all Accounts
Under 35 years old	$22,262	$29,786	$25,279	$ 8,180	$11,000	$9,600
35 to 44	76,573	78,008	81,308	33,890	30,000	37,000
45 to 54	152,290	163,656	156,124	56,090	60,000	63,000
55 to 64	230,540	253,048	271,920	64,270	88,000	100,000
65 or older	178,180	188,822	207,321	64,270	55,000	60,800
All households	122,227	140,350	148,579	35,060	36,000	45,000

Source: Congressional Research Service (CRS), Retirement Savings and Household Wealth in 2007

It is important to note the significant differences between the “average” and “median” figures. The averages in all age groupings are much higher than the medians indicating that the averages are skewed by some households having exceptionally large retirement savings. The median amounts (median represents the midpoint – 50% having more; 50% having less) is likely the more representative state of affairs for most households.

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Another source of data for retirement savings by age is the the Employee Benefit Research Institute (EBRI). EBRI released a report in December 2008 on average 401k balances reported during 2007 by participants in its Participant-Directed Retirement Plan Data Collection Project.²

Average 401k Account Balances by Age Group and Job Tenure

Age Group	Tenure w/Employer 0-2 Years	Tenure w/Employer >2-5 Years	Tenure w/Employer >5-10 Years	Tenure w/Employer >10-20 Years	Tenure w/Employer >20-30 Years	Tenure w/Employer >30 Years
20s	$4,491	$10,748	$18,564	$ –	$ –	$ –
30s	11,502	23,024	42,861	62,207	–	–
40s	16,672	31,055	58,262	100,856	151,193	–
50s	20,603	34,882	63,783	111,840	194,385	191,225
60s	24,544	35,399	60,525	105,504	172,584	210,457

Source: Employee Benefit Research Institute, 401(k) Plan Asset Allocation, Account Balances, and
Loan Activity in 2007

Note that the EBRI data includes only 401k plan balances, the primary retirement accounts for most people. Certain other retirement account types (IRA, 457, 403b, etc.) are not included in the EBRI data base.

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A March 2009 study of 401k borrowing from the Federal reserve Board included this additional piece of information:

Median 401k Balances for Househods With and Without 401k Loan Balances

	All	Without 401k Loan	With 401k Loan
Mean Age	41.9	41.7	42.6
Median 401k Balance	$23,000	$21,000	$33,000

Source: Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board,New Evidence on 401(k) Borrowing and Household Balance Sheets. Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C.

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Finally, the Center for Retirement Research at Boston College includes the following telling graphic in its March 2009 Update on 401k Plans. This underscores the most important fact about retirement account balances – regardless of how American’s compare against each other, for all age groups, we are woefully short of where we should be.

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While comparisons of 401k information between households is useful and informative, the most meaningful comparison is how your retirement account balances stack up against your future retirement nestegg goal. For this you should try our easy-to-use basic retirement calculator or this simple retirement calculator that takes into account the fact that most retirees experience declining expenses as they age.

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Notes:

1. Data for this table comes from the Congressional Research Service report Retirement Savings and Household Wealth:
   Trends from 2001 to 2004 [↩]
2. According to EBRI, their database covers 45 percent of the universe of 401(k) plan participants, 12 percent of plans, and 47 percent of 401(k) plan assets. [↩]